Risk Preferences

Income Risk, Precautionary Saving, and Loss Aversion – An Empirical Test

This paper empirically examines the behavioral precautionary saving hypothesis by Kőszegi and Rabin (2009) stating that uncertainty about future income triggers sav- ing because of loss aversion. We extend their theoretical analysis and …

Higher Order Risk Preferences: New Experimental Measures, Determinants and Field Behavior

We use a novel method to elicit and measure higher order risk preferences (prudence and temperance) in an experiment with 658 adolescents. In line with theoretical predictions, we find that higher order risk preferences - particularly prudence - are …