This study examines how experiencing a pandemic affects household investment behaviors. By leveraging cross-state variations in the H1N1 mortality rate in 2009, our difference-in-differences analysis reveals interesting findings. Although the pandemic does not significantly affect stock market...

I show that stochastic contracts generate powerful incentives when agents suffer from probability distortion. When implementing these contracts, the principal can target probability distortions in order to inflate the agent's perceived benefits of exerting high levels of effort. This novel...

This paper studies the relationship between risk propensity, education and financial literacy. The results of the empirical investigation confirm the importance of the key explanatory variables of education and financial competence. Since they are both included in the model, the different roles...

Children and their parents resemble each other in terms of economic preferences such as patience and risk tolerance. What drives the intergenerational correlation in preferences? We build a model of preference formation that combines genetic transmission, state influence through childcare...

A growing body of empirical research has developed measures of economic preferences related to risk taking and intertemporal choice. This research has documented pronounced heterogeneity in preferences across and within societies, and also provided evidence that these differences are culturally...

This study examines the relationship between financial risk tolerance and organizational resilience among small business managers in the Brazilian Northeast, a region strongly affected by economic fragility and intensified uncertainty during and after the COVID-19 pandemic. Using a positivist,...

This paper provides the first evidence that children's economic preferences vary systematically with parental mental health. Using experimentally elicited measures of economic preferences from more than 4,500 children in Bangladesh, we document that children of parents with indications of mental...

Recent work in economics has developed survey-based measures of economic preferences that are "experimentally" or "behaviorally validated." We scrutinize this approach focusing on the Global Preference Survey (Falk et al., 2018, 2023). Replicating their behavioral validation on almost 2,000...

Using granular security-level data from bond funds domiciled in the US and the euro area, we identify a market-based risk-taking channel of monetary policy transmission via the credit-risk and the maturity structure of bond funds' portfolios. We measure credit risk at the fund level as the...

As China's population ages and the sustainability of the public pension system is at risk, personal savings become crucial. As such, the quality of financial planning for retirement (FPR) has been recognized as a key to safeguarding financial well-being during retirement. This study examines the...

Performance-contingent pay raises productivity, yet in the German Socio-Economic Panel (SOEP) only about 16% of workers report receiving performance pay, with the incidence being roughly seven percentage points higher among university graduates than among non-graduates. This coexistence of low...

This paper provides the first evidence that children's economic preferences vary systematically with parental mental health. Using experimentally elicited measures of economic preferences from more than 4,500 children in Bangladesh, we document that children of parents with indications of mental...

This paper provides the first evidence that children’s economic preferences vary systematically with parental mental health. Using experimentally elicited measures of economic preferences from more than 4,500 children in Bangladesh, we document that children of parents with indications of...

We test whether a conditional cash lottery targets prevention on those doing too little because of inverse-S probability distortion that also causes overvaluation of a lottery. Consistent with theory, Filipinos perceiving their cardiovascular disease (CVD) risk in a wide intermediate interval...

Misperception of long-term care (LTC) risk may distort insurance and saving decisions. Comparing older Americans' subjective probabilities of nursing home entry with realized outcomes, we find LTC risk perceptions are inaccurate, partly due to inappropriate weighting of risk factors insurers can...

We elicit reservation wage premia for relocating to two Ukrainian cities, using a household survey conducted in mid-April to mid-July 2024 during the Russian invasion of Ukraine: high-risk Kharkiv (near the frontline) and moderate-risk Kyiv. Risk tolerance is a strong predictor of willingness to...

Digital transformation in commercial banks is a critical enabler of modern financial development. While technological advancement and resource allocation are key drivers, managerial attributes also play a decisive role in shaping transformation trajectories. Managerial myopia-often arising from...

Research on financial risk tolerance and risk-taking increasingly incorporates personality traits into predictive and descriptive models of risk-taking behavior; however, intercorrelations among traits can obscure the unique contributions of individual traits. This is known as the suppressor...

Household composition in the United States is increasingly diverse; however, research into the diversity of the financial decision maker's sexual orientation has yet to be explored. This analysis examines whether there are differences in financial risk tolerance between same-sex and different-sex...

Price premia between day-ahead and intraday electricity markets are well documented and often attributed to factors such as forecast errors or market frictions. However, existing explanations provide limited insight into why these price premia can exhibit a systematic diurnal structure, as...

This paper provides the first evidence that children's economic preferences vary systematically with parental mental health. Using experimentally elicited measures of economic preferences from more than 4,500 children in Bangladesh, we document that children of parents with indications of mental...

Why some chief executive officers (CEOs) pursue risk-taking at the firm level while others favor caution remains a foundational question in management. We adopt the microfoundations perspective to tackle this question. As we examine the impact of CEO origin on firm risk-taking, we further...

Making financial decisions under risk and uncertainty has become part of everyday life. Traditional finance explores the objective side of risk, analysing the decisions made by perfectly rational individuals in efficient market conditions. Behavioural finance seeks to connect theory with...

Studies have frequently found that women are more risk averse than men. In this paper, we depart from usual practice in economics that treats risk attitude as a primitive, and instead adopt a neuroeconomic approach where risk attitude is determined by the reference point which can be easily...