The main aim of this study is to describe temporal risk aversion impact on the present value. Here the case of discrete time is considered only. Some initial problem with differential equation is obtained as a result of these studies. Then the discounting function is given as the unique solution...

In asset pricing models, the indirect synchronizations of changes in time-varying relative risk aversion (RRA) with changes in elasticity of intertemporal substitution (EIS) and/or changes in consumption growth are overlooked confounding factors that limit our understanding of the role of...

Loss aversion, the principle that losses loom larger than gains, is among the most widely accepted ideas in the social sciences. The first part of this article introduces and discusses the construct of loss aversion. The second part of this article reviews evidence in support of loss aversion....

This paper focuses on determining the factors influencing investors' risk-taking through empirical evidence from Vietnam. This study investigates risk perception, expected return and herding behavior, and other determinants such as historical volatility and subjective financial risk attitude;...

The notion of optimism or pessimism is defined in the psychology literature in terms of forecasting where the term is used more generally than in statistics. Here we use the theory of loss aversion combined with Bayesian forecasting to propose rather precise definitions of optimism and...

A key ingredient of many popular asset pricing models is that investors exhibit countercyclical risk aversion, which helps explain major economic puzzles such as the strong and systematic variation in risk premiums over time and the high volatility of asset prices. There is, however,...

We find that an entrepreneur's negative personal attitude towards debt - debt aversion - affects the financing decisions of the businesses they run. We conduct a large-scale survey of entrepreneurs and link it to their firms' registry-based financial information. After controlling for a range of...

This paper examines the distributional impact of increases to out-of-work transfers, increases to work-contingent transfers, and increases in higher rates of income tax over the whole of life. We find that, in contrast to what is implied by standard snapshot analyses, increases to...

We report an experiment where each subject's ambiguity sensitivity is measured by an ambiguity premium, a concept analogous to and comparable with a risk premium. In our design, some tasks feature known objective risks and others uncertainty about which subjects have imperfect, heterogeneous,...

We report an experiment where each subject's ambiguity sensitivity is measured by an ambiguity premium, a concept analogous to and comparable with a risk premium. In our design, some tasks feature known objective risks and others uncertainty about which subjects have imperfect, heterogeneous,...