We present a model in which a long-lived bank endogenously learns about the environment for financial innovation through experimentation on its clients. When the bank has superior knowledge of the state of the world facing its clients, it may engage in inefficient or "reckless" experimentation...

We compare seven established risk elicitation methods and investigate how they robustly explain eleven kinds of risky behavior with 760 individuals. Risk measures are positively correlated; however, their performance in explaining behavior is heterogeneous and, therefore, difficult to assess ex...

We compare seven established risk elicitation methods and investigate how they explain an extensive set of risky behavior from a large household survey. We find overall positive correlation between items and low explanatory power in terms of behavior. Using an average of seven risk elicitation...

We use an accounting-based approach to link two primary measures of ‘value' to expected returns for countries: earnings-to-price (E/P) and book-to-price (B/P). We document that when country-level earnings are less affected by accounting distortions related to conservative accounting for...

A statistical functional is elicitable if it can be defined as the minimizer of a suitable expected scoring function (see Gneiting (2011), Ziegel (2013) and the references therein). With financial applications in view, we suggest a slightly more restrictive definition than Gneiting (2011), and...