Time preference, emotional "shock sensitivity" and "resilience" are shaping an emotional probability weighting function capable to "replicate" gender specific weighting functions. By maximizing emotional expected utility the proposer (P) and the responder (R) in an ultimatum game are choosing...

We illustrate the strong implications of recursivity, a standard assumption in dynamic environments, on attitudes toward uncertainty. We show that in intertemporal consumption choice problems, recursivity always implies constant absolute ambiguity aversion (CAAA) when applying the standard...

Use of preference information to infer risk tolerance has increased in recent years as a way to inform benefit-risk evaluations in regulatory and medical decision making. However, a framework for the measurement of tolerance for multiple uncertain outcomes has not been formalized when choices do...

Keynes (1921) and Ellsberg (1961) have articulated an aversion toward betting on an urn containing balls of two colors of unknown proportion to one with a 50-50 composition. Keynes views this as reflecting different preferences for bets arising from different sources of uncertainty. Ellsberg...

This paper introduces and studies a new family of diffusion models for stock prices with applications in portfolio optimization. The diffusion model combines (stochastic) elasticity of volatility (EV) and stochastic volatility (SV) to create the SEV-SV model. In particular, we focus on the SEV...

In developing world, the risk behavior of farmers is very crucial as their daily risk and uncertainty decisions affect their livelihood and overall well-being in the long run. Recent studies related to risky choices among poor farmers found varied results in various countries. Present study...

Probabilistic risk beliefs are key drivers of economic and health decisions, but people are not always certain about their beliefs. We study these "imprecise probabilities", also known as ambiguous beliefs. We show that imprecision is measurable separately from the levels of risk beliefs. People...