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Aversion
Kinds of Aversion Selected AbstractsGENDER-BASED RISK AVERSION AND RETIREMENT ASSET ALLOCATIONECONOMIC INQUIRY, Issue 1 2010KATHLEEN ARANO This research examines whether women have higher risk aversion than men as demonstrated by their retirement asset allocation. The analysis is extended to investigate how retirement asset investment decisions are made in married households. Initial results suggest controlling for demographic, income, and wealth differences lead to no significant difference in the proportion of retirement assets held in stocks between women and male faculty. For married households with joint investment decision making, results indicate that gender differences are a significant factor in explaining individual retirement asset allocation. Our estimates imply that women faculty are more risk averse than their male spouse. (JEL J16, G11, D10) [source] STOCK RETURNS, ASYMMETRIC VOLATILITY, RISK AVERSION, AND BUSINESS CYCLE: SOME NEW EVIDENCEECONOMIC INQUIRY, Issue 2 2008SEI-WAN KIM We study how three interrelated phenomena,excess stock returns and risk relation, risk aversion, and asymmetric volatility movement,change over business cycles. Using an asymmetric generalized autoregressive conditional heteroskedasticity in mean model and a Markov switching model, we find that excess stock return increases and asymmetric volatility movement is weakened during boom periods. This suggests that investors become more risk-averse during boom periods (i.e., procyclical risk aversion), which we confirm using a calibration of a simple equilibrium model. (JEL C32, E32, G12) [source] IMPACT OF RISK AVERSION ON THE OPTIMAL ROTATION WITH STOCHASTIC PRICENATURAL RESOURCE MODELING, Issue 3 2008PEICHEN GONG Abstract This paper examines the effect of risk aversion on the optimal rotation when the stumpage price is stochastic. Assuming that the stumpage price is normally distributed, we show that the optimal rotation under risk aversion may be shorter than, equal to, or longer than the corresponding optimal rotation under risk neutrality. Which of these cases holds true depends on the interest rate and the real regeneration cost, and can be determined based on the marginal variance (i.e., the derivative of the variance function with respect to rotation age) evaluated at the optimal rotation under risk neutrality. Furthermore, we show that there exists a monotone continuous curve, which divides the interest rate-regeneration cost space into two regions where risk aversion affects the optimal rotation differently. For a given interest rate, risk aversion shortens (prolongs) the optimal rotation if the regeneration cost lies below (above) the curve. Along the separating curve the optimal rotation under risk aversion coincides with the optimal rotation under risk neutrality. Two examples are presented to demonstrate the separating curve and the impacts of risk aversion on the optimal rotation. [source] TIME VARIABILITY IN MARKET RISK AVERSIONTHE JOURNAL OF FINANCIAL RESEARCH, Issue 3 2009Dave Berger Abstract We adopt realized covariances to estimate the coefficient of risk aversion across portfolios and through time. Our approach yields second moments that are free from measurement error and not influenced by a specified model for expected returns. Supporting the permanent income hypothesis, we find risk aversion responds to consumption-smoothing behavior. As income increases, or as the consumption-to-income ratio falls, relative risk aversion decreases. We also document variation in risk aversion across portfolios: risk aversion is highest for small and value portfolios. [source] Ambiguity Aversion, Robustness, and the Variational Representation of PreferencesECONOMETRICA, Issue 6 2006Fabio Maccheroni We characterize, in the Anscombe,Aumann framework, the preferences for which there are a utility functionu on outcomes and an ambiguity indexc on the set of probabilities on the states of the world such that, for all acts f and g, . The function u represents the decision maker's risk attitudes, while the index c captures his ambiguity attitudes. These preferences include the multiple priors preferences of Gilboa and Schmeidler and the multiplier preferences of Hansen and Sargent. This provides a rigorous decision-theoretic foundation for the latter model, which has been widely used in macroeconomics and finance. [source] Inequality Aversion versus Risk AversionECONOMICA, Issue 277 2003Yoram Kroll Inequality aversion and risk-aversion are widely assumed in economic models; however existing economic literature fails to distinguish between the two. This paper presents methodology and a laboratory experiment, which separates inequality aversion from risk aversion. In a set of laboratory experiments, subjects had to choose between two risky alternatives which pay meaningful prizes with the same individual risk but different levels of egalitarianism. Thus, the choice of the more egalitarian alternative implies a higher level of inequality aversion. The experiment was conducted among children, some of whom live on a communal system (kibbutz) and some in the city. [source] The Roots of Entrepreneurship and Labour Demand: Individual Ability and Low Risk AversionECONOMICA, Issue 269 2001C. M. Van Praag This paper develops a model as a means to explain business formation and the labour demand of entrepreneurs. An individual will become an entrepreneur if the expected rewards surpass the wages of employment, and the expected rewards depend on an assessment of individual ability and on risk attitude. Actual ability determines success and hence the demand for wage labour of the firm. In equilibrium these factors govern the distribution of a given workforce over entrepreneurs and employees. The model is fitted to Dutch survey data. The empirical results confirm the importance of both risk-taking and ability for successful entrepreneurship. [source] A Theory of Poverty Aversion and Civil Society DevelopmentECONOMICS & POLITICS, Issue 1 2003Paul Azam A simple model is used to discuss the political economy of the emergence of relative poverty as a foundation for redistribution policy in rich countries, as opposed to the dominant concept of absolute poverty, which prevails in the rest of the world. This issue is analyzed in connection with that of the development of civil society and its role relative to the state in fighting poverty. [source] Ethanol-Induced Conditioned Taste Avoidance: Reward or Aversion?ALCOHOLISM, Issue 3 2009Chuang Liu Background:, Rats avoid intake of a palatable taste cue when paired with all drugs of abuse tested. Evidence suggests that, at least for morphine and cocaine, rats avoid the taste cue because they are anticipating the rewarding properties of the drug. Thus, the suppressive effects of a rewarding sucrose solution and cocaine, but not those of the putatively aversive agent, lithium chloride (LiCl), are exaggerated in drug-sensitive Lewis rats. Likewise, the suppressive effects of sucrose and morphine, but not those of LiCl, are eliminated by bilateral lesions of the gustatory thalamus. Unlike morphine and cocaine, it is less clear whether rewarding or aversive drug properties are responsible for ethanol-induced suppression of intake of a taste cue. The present set of studies tests whether, like cocaine, ethanol-induced suppression of intake of a taste cue also is greater in the drug-sensitive Lewis rats and whether the suppressive effects of the drug are prevented by bilateral lesions of the taste thalamus. Methods:, In Experiment 1, fluid-deprived Lewis and Fischer rats were given 5-minute access to 0.15% saccharin and then injected with saline or a range of doses of ethanol (0.5, 0.75, 1.0, or 1.5 g/kg). There was a total of 6 such pairings. In Experiments 2 and 3, Sprague,Dawley rats received bilateral electrophysiologically guided lesions of the gustatory thalamus. After recovery, suppression of intake of the saccharin cue was evaluated following repeated daily pairings with either a high (1.5 g/kg) or a low (0.75 g/kg) dose of ethanol. Results:, Ethanol-induced suppression of intake of the saccharin conditioned stimulus (CS) did not differ between the drug-sensitive Lewis rats relative to the less-sensitive Fischer rats. Lesions of the taste thalamus, however, prevented the suppressive effect of the 0.75 g/kg dose of the drug, but had no impact on the suppressive effect of the 1.5 g/kg dose of ethanol. Conclusion:, The results suggest that the suppressive effects of ethanol on CS intake are mediated by both rewarding and aversive consequences, varying as a function of dose. [source] CREB Gene Transcription Factors: Role in Molecular Mechanisms of Alcohol and Drug AddictionALCOHOLISM, Issue 2 2005Subhash C. Pandey This article presents the proceedings of a symposium presented at the meeting of the Research Society on Alcoholism, held in Vancouver, British Columbia, Canada, in June 2004. The organizers and chairpersons were Subhash C. Pandey and Fulton Crews. The presentations were (1) Ethanol Modulation of CREB: Role in Dependence and Withdrawal, by Fulton Crews; (2) Effects of D1 Dopamine Receptor Activation During Withdrawal From Chronic Morphine: Enhanced CREB Activation and Decreased Conditioned Place Aversion, by Elena H. Chartoff; (3) CREB-Haplodeficient Mice: Role in Anxiety and Alcohol-Drinking Behaviors, by Subhash C. Pandey; and (4) A Role for CREB in Stress and Drug Addiction, by Julie A. Blendy. [source] Managers and Productive Investment Decisions: The Impact of Uncertainty and Risk AversionJOURNAL OF SMALL BUSINESS MANAGEMENT, Issue 1 2004Jacques-Bernard Sauner-Leroy The main purpose of this study is to examine the links among uncertainty, manager's risk-taking attitude, and the level of productive investment of small and medium-size enterprises. The analysis makes use of qualitative data collected by the Bank of France in a national survey conducted in 1999 on the strategic behavior of 1,578 French industrial small and medium-size firms. A multiple regression model is used to test the impact of uncertainty and risk aversion on investment decisions. Results support the hypothesis of the literature stating that productive investment is correlated positively with risk taking and is correlated negatively with uncertainty. [source] Association Between Ethanol and Sucrose Intake in the Laboratory Mouse: Exploration Via Congenic Strains and Conditioned Taste AversionALCOHOLISM, Issue 3 2000David A. Blizard Background: A substantial body of literature indicates that intakes of "sweet' solutions and ethanol are positively correlated across inbred strains of rats and mice but there has been speculation that the correlation is fortuitous and there is no agreement on the underlying mechanism. Methods and Results: We assessed the correlation between intake of sucrose and ethanol in congenic mice created by backcrossing alleles favoring sucrose intake from the BXD RI-5 strain into DBA/2J. In addition, to probe more specifically the interrelationship between intake of the two solutions, we examined aversion generalization from sucrose to ethanol in C57BL/6J mice. Among the congenic mice, a statistically significant product-moment correlation of r= 0.36 (p < 0.02) was found between 6-hr intake of sucrose corrected for differences in baseline water intake and preference for 10% ethanol presented in a 96-hr 2-bottle test. Furthermore, C57BL/6J male mice conditioned to avoid a 0.2 M sucrose solution generalized their aversion to a 10% ethanol solution presented in the same 2-bottle test, drinking 42.1 ± 9.38% (mean ± SE) of their total fluid intake from the ethanol tube, compared with the control group mean of 69.86 ± 8.84%. Conclusions: The positive association between intake of sucrose and ethanol in congenic mice provides strong evidence that the previously demonstrated genetic correlation between intake of these solutions is not the result of fortuitous fixation of unrelated alleles and provides suggestive evidence that, at least in the B6/D2 lineage, the genetic association between intakes of the two solutions reflects close linkage or the pleiotropic effects of the same genes. The demonstration that a conditioned taste aversion to sucrose generalized to ethanol in the C57BL/6J inbred mouse strain is an extension of similar observations in outbred rats and specifically demonstrates that intake of the two solutions is controlled by some of the same physiologic or neurological processes and thus is consistent with the pleiotropic interpretation of the genetic correlation. [source] Risk Aversion and the Efficiency Wage ContractLABOUR, Issue 1 2004Ouassila Chouikhi This could be due to informational problems. Reformulating the Shapiro and Stiglitz model as a sequential game, this paper examines the relations between the terms of the efficiency wage contract offered by a firm and the responses of a worker, under incomplete information about the degree of risk aversion of the firm and the worker. It shows that under incomplete information about the degree of risk aversion of the worker, shirking can emerge as an equilibrium phenomenon. For any efficiency wage contract, a worker will shirk if the degree of risk aversion of the worker is less than that corresponding to the contract. [source] The Prospects for Prospect Theory: An Empirical Evaluation of International Relations Applications of Framing and Loss AversionPOLITICAL PSYCHOLOGY, Issue 3 2004William A. Boettcher III International relations theorists have tried to adapt prospect theory to make it relevant to the study of real-world decision-making and testable beyond the constraints of the laboratory. Three experiments with undergraduate samples were conducted in an effort to clarify the advantages and limitations of prospect theory as adapted to explain political behavior. The first experiment tested hypotheses regarding the impact of prospect framing on group polarization, but these were only weakly supported. The second and third experiments examined alternative adaptations of the concept of framing; the results suggest that the political science expansion of the concept of framing may, under certain conditions, produce clear and robust preference reversals. [source] Risk Aversion, Transparency, and Market PerformanceTHE JOURNAL OF FINANCE, Issue 2 2002M. Ángeles De Frutos Using a model of market making with inventories based on Biais (1993), we find that investors obtain more favorable execution prices, and they hence invest more, when markets are fragmented. In our model, risk-averse dealers use less aggressive price strategies in more transparent markets (centralized) because quote dissemination alleviates uncertainty about the prices quoted by other dealers and, hence, reduces the need to compete aggressively for order flow. Further, we show that the move toward greater transparency (centralization) may have detrimental effects on liquidity and welfare. [source] Ontogenetic differences in the expression of conditioned visual aversionsDEVELOPMENTAL PSYCHOBIOLOGY, Issue 2 2003Joyce A. Jagielo Abstract We examined ontogenetic differences in the expression of conditioned visual aversions. Sprague-Dawley-derived rats, 16 or 21 days of age, were conditioned with either an element (brightness) or compound (brightness/odor) CS+ and tested for their aversion to the common element (brightness). Aversions to the brightness cue were assessed by either a traditional test of preference between the CS+ brightness and a contrasting brightness or by assessment of freezing in the presence of either brightness cue. The results indicated that strength of conditioning as well as the expression of overshadowing/potentiation was dependent on the age of the animal and on the technique used to assess conditioning. © 2003 Wiley Periodicals, Inc. Dev Psychobiol 42: 123,130, 2003 [source] Winners and losers of conservation policies for European eel, Anguilla anguilla: an economic welfare analysis for differently specialised eel anglersFISHERIES MANAGEMENT & ECOLOGY, Issue 2 2010M. DOROW Abstract, Recreational specialisation theory was coupled with a discrete choice experiment to understand eel, Anguilla anguilla L., angler's heterogeneity in their reaction to regulatory changes and the associated welfare changes. Differently specialised eel anglers exhibited distinct preferences for catch variables and eel angling regulations. All anglers preferred slightly to moderately stricter regulations than are currently in place; however, such policies particularly benefited casual eel anglers. In contrast, advanced eel anglers would be most penalised by highly restrictive regulations as indicated by substantial reductions in economic welfare. Aversions to stricter regulations found for advanced anglers contradicted predictions from specialisation theory. From an eel management perspective, the implementation of some simple tools such as increased minimum-size limits will reduce angling mortality on eel and simultaneously increase the welfare of anglers. By contrast, highly restrictive eel angling regulations will result in considerable economic welfare losses of several million , per year for northern Germany alone. [source] A Pride of Museums in the Desert: Saudi Arabia and the "Gift of Friendship" ExhibitionCURATOR THE MUSEUM JOURNAL, Issue 1 2005John Coppola ABSTRACT The task of developing and presenting an exhibition at the King Abdul Aziz Historical Center in Riyadh, Saudi Arabia illustrates the challenges of museum work in a global environment filled with widely differing social, cultural, political, and professional norms. The exhibition, The Gift of Friendship, was largely drawn from the collections of the Franklin D. Roosevelt Library, in New York State. Saudi Arabia and its neighboring countries view museums as a source of national pride and public engagement, and frequently draw on Western expertise in building them. There are implications for exhibition development and interpretation in a society undergoing rapid modernization, but also one noted for an aversion to social science research. A postscript looks at museum trends in Oman, after 9/11 and the Iraq war. [source] Opportunism in Capital Budget Recommendations: The Effects of Past Performance and Its Attributions,DECISION SCIENCES, Issue 3 2001Joanna L. Ho Abstract This study uses an experiment to examine the separate and combined effects of managers' loss aversion and their causal attributions about their divisions' performance on tendencies to make goal-incongruent capital budget recommendations. We find that managers' recommendations are biased by their loss aversion. In particular, managers of high-performing divisions are more likely than managers of low-performing divisions to propose investments that maximize their division's short-term profits at the expense of the firm's long-term value. We also find that managers' recommendations are biased by their causal attributions. In particular, managers are more likely to propose investments that maximize their division's short-term profits at the expense of the firm's long-term value when they attribute their division's performance to external causes (e.g., task difficulty or luck) rather than to internal causes (e.g., managerial ability or effort). Further, the effects of causal attributions are greater for managers of high-performing divisions than for managers of low-performing divisions. The study's findings are important because loss aversion and causal attributions are often manifested in firms. Thus, they may bias managers' decisions, which in turn may be detrimental to the firms' long-term value. [source] Domperidone interferes with conditioned disgust reactions but not taste avoidance evoked by a LiCl-paired taste in infant ratsDEVELOPMENTAL PSYCHOBIOLOGY, Issue 4 2008Ricardo Marcos Pautassi Abstract Rats exhibit taste avoidance and conditioned disgust reactions when stimulated with a tastant paired with lithium chloride (LiCl). Lithium-mediated activation of chemoreceptor nuclei at the brainstem appears to determine the acquisition of conditioned taste aversion (CTA) in adult rodents. Domperidone (DOM), an anti-emetic drug that does not cross the blood,brain barrier, was employed to analyze mechanisms underlying LiCl-mediated CTA in infant rats. On postnatal day 13 animals were given DOM followed by a pairing between intraoral saccharin and LiCl. Saccharin consumption at testing was lower in lithium-treated pups than in controls. DOM did not interfere with this LiCl-mediated taste avoidance but significantly decreased LiCl-mediated disgust reactions (head-shaking and wall climbing). Activation of the emetic system of the brainstem does not seem necessary for the acquisition of LiCl-mediated conditioned taste avoidance. Yet, these centers seem to be involved in the palatability shift resulting from taste-LiCl pairings. These results indicate an early dissociation between conditioned disgust reactions and conditioned taste avoidance. © 2008 Wiley Periodicals, Inc. Dev Psychobiol 50: 343,352, 2008. [source] Emergence of long-term memory for conditioned aversion in the rat fetusDEVELOPMENTAL PSYCHOBIOLOGY, Issue 3 2004Nadège Gruest Abstract Pregnant rats were subjected to garlic essential oil as the conditioned stimulus and 45 min later to LiCl as the unconditioned stimulus either on embryonic Days 15 and 16 (E15 and E16) or on 18 and 19 (E18 and E19). Control dams received only garlic, LiCl, or water. Progenies were tested on garlic drinking 6 weeks after the exposure to the stimuli via the mothers. In the E18 to 19 group, rats that were exposed to paired garlic,LiCl expressed a significant aversion for garlic. In the E15 to 16 group, no significant differences appeared between subgroups. These results confirm that an associative memory can be established before birth and suggests that this ability potentially emerges in a short time window of 3 days at the end of gestation. Moreover, it appears that a long-term memory can be acquired in utero and retained to be expressed postnatally when animals are autonomous. © 2004 Wiley Periodicals, Inc. Dev Psychobiol 44: 189,198, 2004. [source] Ontogenetic differences in the expression of conditioned visual aversionsDEVELOPMENTAL PSYCHOBIOLOGY, Issue 2 2003Joyce A. Jagielo Abstract We examined ontogenetic differences in the expression of conditioned visual aversions. Sprague-Dawley-derived rats, 16 or 21 days of age, were conditioned with either an element (brightness) or compound (brightness/odor) CS+ and tested for their aversion to the common element (brightness). Aversions to the brightness cue were assessed by either a traditional test of preference between the CS+ brightness and a contrasting brightness or by assessment of freezing in the presence of either brightness cue. The results indicated that strength of conditioning as well as the expression of overshadowing/potentiation was dependent on the age of the animal and on the technique used to assess conditioning. © 2003 Wiley Periodicals, Inc. Dev Psychobiol 42: 123,130, 2003 [source] The interaction of age and unconditioned stimulus intensity on long-trace conditioned flavor aversion in ratsDEVELOPMENTAL PSYCHOBIOLOGY, Issue 2 2002James R. Misanin Abstract To see if the neural representation of the conditioned stimulus (CS) is available to old-age rats beyond the time it is available to young adults, the intensity of the unconditioned stimulus (US) and the length of the CS,US interval were systematically varied in a trace conditioning experiment. Results indicated that increasing US intensity extends the interval over which trace conditioning is evident in old-age rats but not in young adults, suggesting that trace decay occurs more rapidly in young rats. Results were interpreted in terms of age differences in the workings of hypothesized biochemical timing mechanisms that may directly influence the ability to associate stimuli over trace intervals in conditioned taste-aversion procedures. © 2002 Wiley Periodicals, Inc. Dev Psychobiol 40: 131,137, 2002. DOI 10.1002/dev.10018 [source] Multivariate correlates of extinction proneness in a naturally fragmented landscapeDIVERSITY AND DISTRIBUTIONS, Issue 4 2007James I. Watling ABSTRACT Habitat loss and fragmentation threaten a large proportion of terrestrial biodiversity, and identifying the ecological traits associated with extinction proneness is of widespread interest. We used a multivariate statistical approach to identify combinations of ecological traits that best allowed us to identify extinction-prone amphibians and reptiles in a fragmented landscape in north-eastern Bolivia. Extinction-prone amphibians were rare and did not utilize the savannah matrix separating forest islands, whereas extinction-prone reptiles were trophically specialized. Rarity and matrix aversion are among the most widely reported correlates to extinction proneness, and we argue that an increased understanding of their role as drivers of extinction processes is necessary. We suggest that the absence of reptilian vertebrate predators may exacerbate trophic cascades in habitat patches. [source] A Dark Age Peter Principle: Beowulf's incompetence thresholdEARLY MEDIEVAL EUROPE, Issue 1 2010Oren Falk Many readers, recognizing the incompatibility of heroism with the duties of kingship, have argued that Beowulf tells a story of colossal failure. Drawing on anthropological theory, I propose that the protagonist is more Big-Man than king and that his heroism, far from a socially dysfunctional flaw, is in fact the leash by which society yanks him back from establishing himself as king. Beowulf thus speaks to an aristocracy disinclined to submit to royalty. The poem shines a light on Anglo-Saxons' aversion to despotic rule: to protect its own decentralized political structure, society against the state foredooms King Beowulf to death. [source] Consumption Over the Life CycleECONOMETRICA, Issue 1 2002Pierre-Olivier Gourinchas This paper estimates a structural model of optimal life-cycle consumption expenditures in the presence of realistic labor income uncertainty. We employ synthetic cohort techniques and Consumer Expenditure Survey data to construct average age-profiles of consumption and income over the working lives of typical households across different education and occupation groups. The model fits the profiles quite well. In addition to providing reasonable estimates of the discount rate and risk aversion, we find that consumer behavior changes strikingly over the life cycle. Young consumers behave as buffer-stock agents. Around age 40, the typical household starts accumulating liquid assets for retirement and its behavior mimics more closely that of a certainty equivalent consumer. Our methodology provides a natural decomposition of saving and wealth into its precautionary and life-cycle components. [source] GENDER-BASED RISK AVERSION AND RETIREMENT ASSET ALLOCATIONECONOMIC INQUIRY, Issue 1 2010KATHLEEN ARANO This research examines whether women have higher risk aversion than men as demonstrated by their retirement asset allocation. The analysis is extended to investigate how retirement asset investment decisions are made in married households. Initial results suggest controlling for demographic, income, and wealth differences lead to no significant difference in the proportion of retirement assets held in stocks between women and male faculty. For married households with joint investment decision making, results indicate that gender differences are a significant factor in explaining individual retirement asset allocation. Our estimates imply that women faculty are more risk averse than their male spouse. (JEL J16, G11, D10) [source] STOCK RETURNS, ASYMMETRIC VOLATILITY, RISK AVERSION, AND BUSINESS CYCLE: SOME NEW EVIDENCEECONOMIC INQUIRY, Issue 2 2008SEI-WAN KIM We study how three interrelated phenomena,excess stock returns and risk relation, risk aversion, and asymmetric volatility movement,change over business cycles. Using an asymmetric generalized autoregressive conditional heteroskedasticity in mean model and a Markov switching model, we find that excess stock return increases and asymmetric volatility movement is weakened during boom periods. This suggests that investors become more risk-averse during boom periods (i.e., procyclical risk aversion), which we confirm using a calibration of a simple equilibrium model. (JEL C32, E32, G12) [source] THE ROLE OF NONCOGNITIVE SKILLS IN EXPLAINING COGNITIVE TEST SCORESECONOMIC INQUIRY, Issue 1 2008LEX BORGHANS This article examines whether noncognitive skills,measured both by personality traits and by economic preference parameters,influence cognitive tests' performance. The basic idea is that noncognitive skills might affect the effort people put into a test to obtain good results. We experimentally varied the rewards for questions in a cognitive test to measure to what extent people are sensitive to financial incentives. To distinguish increased mental effort from extra time investments, we also varied the questions' time constraints. Subjects with favorable personality traits such as high performance motivation and an internal locus of control perform relatively well in the absence of rewards, consistent with a model in which trying as hard as you can is the best strategy. In contrast, favorable economic preference parameters (low discount rate, low risk aversion) are associated with increases in time investments when incentives are introduced, consistent with a rational economic model in which people only invest when there are monetary returns. The main conclusion is that individual behavior at cognitive tests depends on noncognitive skills. (JEL J20, J24) [source] What drives spreads in the euro area government bond market?ECONOMIC POLICY, Issue 58 2009Simone Manganelli Summary Spreads between euro area government bond yields are related to short-term interest rates, which are in turn related to market liquidity, to cyclical conditions, and to investors' incentives to take risk. In theory, lower interest rates are associated with lower degrees of risk aversion and smaller government bond spreads. Empirically, the Eurosystem's short-term interest rates are positively related to those spreads, which our econometric model finds to include significant and policy-relevant default risk and liquidity risk components. , Simone Manganelli and Guido Wolswijk [source] | |||||||||||||||||||||||||||||||||||||||||||||||||