Related papers: Outside options and risk attitude
Understanding how individuals make decisions involving risk is a fundamental aspect of behavioral research. Despite the ubiquity of risk in various aspects of life, limited empirical work has explored student risk-taking behavior in…
Automation significantly alters human behavior, particularly risk-taking. Previous researches have paid limited attention to the underlying characteristics of automation and their mechanisms of influence on risk-taking. This study…
Pedestrians often need to decide between different routes they can use to reach their intended destinations, both during emergencies and in their daily lives. This route-choice behavior is important in determining traffic management,…
This paper investigates the use of risk measures and theories of choice for modeling risk-averse route choice and traffic network equilibrium with random travel times. We interpret the postulates of these theories in the context of routing,…
This study develops a multi-factor framework where not only market risk is considered but also potential changes in the investment opportunity set. Although previous studies find no clear evidence about a positive and significant relation…
Many U.S. colleges now use test-optional admissions. A frequent claim is that by not seeing standardized test scores, a college can admit a student body it prefers, say with more diversity. But how can observing less information improve…
Strategies aimed at reducing the negative effects of long-term uncertainty and risk are common in biology, game theory, and finance, even if they entail a cost in terms of mean benefit. Here, we focus on the single mutant's invasion of a…
Governments are increasingly turning to algorithmic risk assessments when making important decisions, such as whether to release criminal defendants before trial. Policymakers assert that providing public servants with algorithmic advice…
Policy learning algorithms are widely used in areas such as personalized medicine and advertising to develop individualized treatment regimes. However, most methods force a decision even when predictions are uncertain, which is risky in…
This paper attempts to find a relationship between agents' risk aversion and inequality of incomes. Specifically, a model is proposed for the evolution in time of surplus/deficit distribution, and the long-time distributions are…
We consider statistical Markov Decision Processes where the decision maker is risk averse against model ambiguity. The latter is given by an unknown parameter which influences the transition law and the cost functions. Risk aversion is…
We examine the effects of introducing a political outsider to the nomination process leading to an election. To this end, we develop a sequential game where politicians -- insiders and outsiders -- make a platform offer to a party, and…
We present a cognitive model of opinion dynamics which studies the behavior of a population of interacting individuals in the context of risk of natural disaster. In particular, we investigate the response of the individuals to the…
We model investor heterogeneity using different required returns on an investment and evaluate the impact on the valuation of an investment. By assuming no disagreement on the cash flows, we emphasize how risk preferences in particular, but…
This paper investigates the dynamics of gambling and how they can affect risk-taking behavior in regions not explored by Kahneman and Tversky's Prospect Theory. Specifically, it questions why extreme outcomes do not fit the theory and…
This paper is concerned with learning decision makers' preferences using data on observed choices from a finite set of risky alternatives. We propose a discrete choice model with unobserved heterogeneity in consideration sets and in…
Three theories offer competing predictions about how people respond to growing diversity in their social environment. Contact theory suggests more exposure to out-groups reduces prejudice; conflict theory predicts a stronger in-group…
Inertia and context-dependent choice effects are well-studied classes of behavioural phenomena. While much is known about these effects in isolation, little is known about whether one of them "dominates" the other when both can potentially…
This paper presents a method for incorporating risk aversion into existing decision tree models used in economic evaluations. The method involves applying a probability weighting function based on rank dependent utility theory to reduced…
We investigate how the choice of decision makers can be varied under the presence of risk and uncertainty. Our analysis is based on the approach we have previously applied to individual decision makers, which we now generalize to the case…