This paper develops a model to estimate the implied default probability of corporate bonds. The model explicitly considers the risk averse behavior of investors to provide a more precise framework for estimating the implied default probability. A Kalman filter method is used to estimate time-varying risk premium associated with the investor's risk aversion. The results of nonlinear regressions ...

In cooperatively breeding systems in which some individuals delay reproduction to help raise others' offspring, environmental variation in space and time influences individual reproductive strategies as well as interspecific patterns of sociality. Although most environmental explanations for cooperative breeding emphasize the mean fitness gains of living socially, the fittest individuals are no...

We examine evolutionary basis for risk aversion with respect to aggregate risk. study populations in which agents face choices between and idiosyncratic show that the maximize long-run growth rate are induced by a heterogeneous population least most averse indifferent obtaining its linear harmonic mean sure, respectively. Moreover, an approximately optimal behavior can be simple distribution ...

In this paper we conduct a series of field experiments in rural India in order to measure preferences related to risk, loss, and ambiguity. Disaggregating by data, we find that on average women are significantly more risk averse and loss averse than men, though the higher average risk aversion arises due to a greater share of women who are extremely risk averse. Through a series of two empirica...

Is it possible to obtain an objective and quantifiable measure of risk backed up by choices made by some specific groups of rational investors? To answer this question, in this paper we establish some behavior foundations for various types of VaR models, including VaR and conditional-VaR, as measures of downside risk. Though supported to some extent with unanimous choices by some specific group...

Previous research has shown that more risk averse workers are at a disadvantage when bargaining over wages. However, it has yet to be determined whether this differential treatment can be sustained in markets where equally productive workers differ in their attitudes toward risk. This paper investigates the question by examining a simple matching model in which the standard assumptions of risk ...

Subjective and affective elements are well-known to influence human decision making. This dissertation presents a theoretical and empirical framework on how human decision makers’ subjective experience and affective prediction influence their choice behavior under uncertainty, frames and emotions. The framework extends and integrates existing theories of prospect theory (PT) and reinforcement l...

Households in developing countries are exposed to various shocks and risks, which leaves them vulnerable as they typically have limited resources cope with them. Even though a large body of development literature has focused on the role risk rural livelihoods, focus is often single sources taking unidimensional view preference. This paper explores diversity perception preferences Ethiopian hous...