first-order approximated solution built by perturbation methods accounts for risk. We show that risk matters economically in … a real business cycle (RBC) model with habit formation and capital adjustment costs and that neglecting risk leads to …

explain a set of behavioral anomalies identified across four distinct domains of decision-making: choice under risk, choice … risk and ambiguity, belief updating, and survey expectations. Our framework makes predictions that we test using exogenous …

We propose a new measure of deviations from expected utility, given data on economic choices under risk and uncertainty …

Loss aversion, risk aversion, and the probability weighting function (PWF) are three central concepts in explaining … decisionmaking under risk. I examine interlinkages between these concepts in a model of decisionmaking that allows for loss averse … commonly observed shapes of PWF and to risk aversion. In particular, I establish a connection between loss aversion and both …