uninsured capital income risk, and suffer from an information-processing capacity constraint. For given attention devoted to … capital income risk, we solve for the optimal consumption-saving choices and show that the expected welfare is increasing with … capacity, assuming a relative risk aversion degree larger than unity. Furthermore, we solve for attention choice and find that …

assumption of (intertemporal) risk neutrality reduces the growth effect in social discounting and significantly amplifies the … importance of risk and correlation. Second, debate and models largely overlook the difference in attitude with respect to risk … and with respect to non-risk uncertainty. The paper derives the resulting changes of the risk-free and the stochastic …

pattern of risk attitudes described by Kahneman and Tversky. In addition, we document a systematic effect of stake sizes on … the magnitude and sign of the relative risk premium, holding fixed both the probability that a lottery pays off and the … in which all departures from risk-neutral bidding are attributed to an optimal adaptation of bidding behaviour to the …

Using the new macro data on risk aversion and patience by Falk et al. (2018), I show that risk aversion and patience … are related to intelligence: high-IQ populations are more patient and more risk averse than low-IQ populations. The … patient because they have long time horizons. The correlation between risk aversion and intelligence supports new micro data …

We propose a new measure of deviations from expected utility, given data on economic choices under risk and uncertainty … deviation (in beliefs, utility, or perceived prices) is within e of expected utility theory. The number e can then be used as a … distance to the theory. We apply our methodology to three recent large-scale experiments. Many subjects in those experiments …

, but are, at best, weakly correlated. Third, WTA and WTP strongly relate to other aspects of risk preferences. The …

intergenerational inequality aversion and for risk aversion. If growth increases (reduces) intra-generational inequality, the SDR is …

low display more tolerance towards risk in a subsequent incentivized lottery task. This effect is mainly driven by … individuals who more firmly believe that life outcomes are beyond their control. This interaction between risk preferences and …

Economic theory suggests that the deterrence of deviant behavior is driven by a combination of severity and certainty …

perception frictions. The model explains adaptive risk attitudes and probability weighting as in prospect theory and … the decision-maker’s understanding of the risk. The strategy does not distort choice in the limit as perception frictions … complexity of the decision problem, then risk attitudes reflect properties of the perception strategy even for vanishing …