We measure the extent of consumption insurance to income shocks accounting for high-order moments of the income … distribution. We derive a nonlinear consumption function, in which the extent of insurance varies with the sign and magnitude of … income risk matters substantially for consumption …

It is a commonplace observation that risk-averse farmers ought to prefer less risk. In this paper, we provide three … qualifications to this commonplace. First, we note that (properly defined) “less risk” need not imply “smaller variance.” Second, we … note that when farmers produce under contract, there may be an important tension between risk and incentives, and we …

We analyze the role of transaction costs in risk transfer markets. For example, when these markets are in their infancy …, they are characterized by few contracts and high transaction costs. In this case, we show that only highly risk … present on either the quality of the risk being transferred or the quality of the counterparty to which the risk is ceded …

Transaction costs in trading involve both risk and return. The return is associated with the cost of immediate … execution and the risk is a result of price movements during a more gradual trading. The paper shows that the trade-off between … risk and return in optimal execution should reflect the same risk preferences as in ordinary investment. The paper develops …