Purpose – Some labor supply curves exhibit inflection points at which they bend backward or fall forward; thus, some workers alternate between increasing and decreasing their labor hours as wages increase. No consensus has yet been reached on the underlying motive for such behavioral...

Purpose – Conventional measures of risk aversion based on first and second derivatives of utility are strictly local instruments, valid only for infinitesimally small changes in wealth. This paper to develop a global index suitable for assessing attitudes toward large‐scale risks....

This paper simplifies and extends the literature on habit‐forming consumption. When addictive and nonaddictive goods are consumed, complements may become substitutes and normal nonaddictive goods may become inferior. Alternatively, when all goods are equally addictive, consumers favor goods...

Insurance and asset holdings are modeled as the jointly determined outcomes of a constrained optimization problem. Consequently, (1) full coverage may be optimal despite limited premium loading, (2) insurance is normal if insurable assets are normal, (3) insurance cannot be a Giffen good, and...

Purpose – Conventional measures of risk aversion based on first and second derivatives of utility are strictly local instruments, valid only for infinitesimally small changes in wealth. This paper to develop a global index suitable for assessing attitudes toward large-scale risks....

Purpose – Some labor supply curves exhibit inflection points at which they bend backward or fall forward; thus, some workers alternate between increasing and decreasing their labor hours as wages increase. No consensus has yet been reached on the underlying motive for such behavioral...