The preferred risk habitat hypothesis, introduced here, is that individual investors select stocks with volatilities … commensurate with their risk aversion; more risk-averse individuals pick lower-volatility stocks. The investors' portfolio … stocks are sold they are replaced by stocks of similar volatilities, and the more risk averse customers indeed hold less …

In this paper, we study the determinants of the value of informal risk sharing groups. In particular, we look at the … if individuals can deviate form risk sharing agreements in coalitions or not. We test empirically several predictable … size of risk sharing groups can be rejected or that only imperfect risk sharing is obtained within the village because of …

) experimenting with the new activity is risky, given uncertain prospects at the destination, (b) overcoming the risk requires … subsistence and the risk of failure is very costly. We test a model with these features by examining heterogeneity in take-up and …

We use a repeated survey of an Italian bank’s clients to test whether investors’ risk aversion increases following the … 2008 financial crisis. We find that both a qualitative and a quantitative measure of risk aversion increases substantially …

averse to risk and ambiguity. The evidence is largely correlational, however, leaving open the question of the direction of … causality. In this paper, we present experimental evidence of causation running from reliance on intuition to risk and ambiguity … lowers the probability of being ambiguity averse by 30 percentage points and increases risk tolerance by about 30 percent in …

Fear of risk provides a rationale for protracted economic downturns. We develop a real business cycle model where … investors with decreasing relative risk aversion choose between a risky and a safe technology that exhibit decreasing returns …. Because of a feedback effect from the interest rate to risk aversion, two equilibria can emerge: a standard equilibrium and a …

A tradition from Knight (1921) argues that more risk tolerant individuals are more likely to become entrepreneurs, but … perform worse. We test these predictions with two risk tolerance proxies: stock market participation and personal leverage … return on assets. The results are similar using personal leverage as risk tolerance proxy. We consider alternative …

that the aggregated excess market returns can be predicted by the skewness risk premium, which is constructed to be the … difference between the physical and the risk-neutral skewness. In an empirical application of the model using more than 20 years … of data on S&P500 index options, we find that, in line with theory, risk-averse investors demand risk-compensation for …

utility function. We then fit the experimental choices to this model to assess the risk attitude of our subjects. Despite the … substantial heterogeneity across subjects, decreasing absolute risk aversion and increasing relative risk aversion are the most … prevalent risk types, and we can classify more than 50% of the subjects in this combined category. We also find evidence of …

are likely to modify students' risk-taking preferences in economically important ways. To test this, we designed a … expected monetary value than the alternative outcome with a certain payoff - and in which the sensitivity of observed risk … preferences for risk-taking are indeed sensitive to whether the girl attends a single-sex or coed school. Girls from single …