Risk aversion is a fundamental trait shaping how individuals, firms and policymakers respond to uncertain outcomes. It encapsulates the preference for certain outcomes over gambles with equivalent ...

Often we confront risks: opportunities where we have some probability of gaining or losing something and have to decide whether or not to accept the opportunity. The simplest risks are financial. For ...

We price equity-linked life insurance with surrender guarantees and account for risk preferences in the form of risk-averse and loss-averse policyholders in continuous time. Risk-averse policyholders ...

A mathematical framework that builds on the economic theory of hidden-action models provides insight into how the unobservable nature of effort and risk shapes investigators’ research strategies and ...

Allison Schrager is a Bloomberg Opinion columnist covering economics. A senior fellow at the Manhattan Institute, she is author of “An Economist Walks Into a Brothel: And Other Unexpected Places to ...

Federal Reserve policymakers are flying blind after the US government shutdown starved them of crucial data, and the uncertainty is testing the nerves of investors. A sudden bout of risk aversion ...

Risk aversion persists in October, but sentiment improves from September due to hopes for interest rate cuts and a better macro outlook. Central bank policy boosts confidence, with the highest ...