scholarly journals Economic preferences and trade outcomes

2021 ◽  
Author(s):  
Alex Korff ◽  
Nico Steffen
Keyword(s):  
Social Preferences ◽  
Risk Attitude ◽  
Trade Flows ◽  
Risk Averse ◽  
Potential Influence ◽  
Country Level ◽  
Driving Mechanisms ◽  
Differentiated Goods ◽  
Economic Preferences ◽  
Risk Transformation

AbstractIntegrating the Global Preference Survey (GPS) and its data of unique scope on national preference structures in patience, risk attitude and reciprocity into a gravity framework, this paper is the first to explore a potential influence on international trade outcomes of economic and social preferences in a unified setting. Adding to the evidence on preferences’ importance for aggregate outcomes, the authors find marked differences in trade flows and relationships, both on the country-level and between bilateral partners. Their main results suggest that countries differing in their willingness to behave negatively reciprocal tend to trade significantly less amongst each other due to the destabilizing effect of unexpected punishments. On the other hand, countries that are patient or risk-averse tend to shift towards exporting more differentiated goods as opposed to homogeneous goods and vice versa. We propose term and risk transformation considerations as the driving mechanisms for this relationship.

Risk Attitude and Corporate Investment under Output Market Uncertainty: Evidence from The Mekong River Delta, Vietnam

2016 ◽  
pp. 59-70
Author(s):  
Ninh Le Khuong ◽  
Nghiem Le Tan ◽  
Tho Huynh Huu
Keyword(s):  
Negative Relationship ◽  
Risk Attitude ◽  
Business Strategies ◽  
Risk Averse ◽  
Market Uncertainty ◽  
Firm Investment ◽  
Output Market ◽  
The Impact ◽  
The Relationship

This paper aims to detect the impact of firm managers’ risk attitude on the relationship between the degree of output market uncertainty and firm investment. The findings show that there is a negative relationship between these two aspects for risk-averse managers while there is a positive relationship for risk-loving ones, since they have different utility functions. Based on the findings, this paper proposes recommendations for firm managers to take into account when making investment decisions and long-term business strategies as well.

scholarly journals OPTIMAL OUTCOME SHARING WITH A CONSORTIUM OF CONTRACTORS

2015 ◽  
Vol 22 (5) ◽  
pp. 655-665 ◽  
Author(s):  
S. Mahdi HOSSEINIAN ◽  
David G. CARMICHAEL
Keyword(s):  
Risk Aversion ◽  
Risk Attitude ◽  
Risk Averse ◽  
Optimal Outcome ◽  
Original Solution ◽  
Project Outcome ◽  
Risk Neutral ◽  
Current Practices

Where a consortium of contractors is involved, there exist no guidelines in the literature on what the outcome sharing arrangement should be. The paper addresses this shortfall. It derives the optimal outcome sharing arrangement for risk-neutral and risk-averse contractors within the consortium, and between the consortium and a risk-neutral owner. Practitioners were engaged in a designed exercise in order to validate the paper’s propositions. The paper demonstrates that, at the optimum: the proportion of outcome sharing among contractors with the same risk-attitude should reflect the levels of their contributions; the proportion of outcome sharing among contractors with the same level of contribu­tion should be lower for contractors with higher levels of risk aversion; a consortium of risk-neutral contractors should receive or bear any favourable or adverse project outcome respectively; and the proportion of outcome sharing to a con­sortium of risk-averse contractors should reduce, and the fixed component of the consortium fee should increase, when the contractors become more risk-averse or the level of the project outcome uncertainty increases. The paper proposes an original solution to the optimal sharing problem in contracts with a consortium of contractors, thereby contributing to current practices in contracts management.

Cutoff Threshold Decisions for Classification Algorithms with Risk Aversion

2021 ◽  
Author(s):  
Andrea C. Hupman
Keyword(s):  
Risk Aversion ◽  
Risk Attitude ◽  
Classification Algorithm ◽  
Classification Algorithms ◽  
Risk Averse ◽  
Optimal Cutoff ◽  
Data Set ◽  
Risk Neutral ◽  
Bayes Algorithm ◽  
Cutoff Threshold

Classification algorithms predict the class membership of an unknown record. Methods such as logistic regression or the naïve Bayes algorithm produce a score related to the likelihood that a record belongs to a particular class. A cutoff threshold is then defined to delineate the prediction of one class over another. This paper derives analytic results for the selection of an optimal cutoff threshold for a classification algorithm that is used to inform a two-action decision in the cases of risk aversion and risk neutrality. The results provide insight to how the optimal cutoff thresholds relate to the associated costs and the sensitivity and specificity of the algorithm for both the risk neutral and risk averse decision makers. The optimal risk averse threshold is not reliably above or below the optimal risk neutral threshold, but the relation depends on the parameters of a particular application. The results further show the risk averse optimal threshold is insensitive to the size of the data set or the magnitude of the costs, but instead is sensitive to the proportion of positive records in the data and the ratio of costs. Numeric examples and sensitivity analysis derive further insight. Results show the percent value gap from a misspecified risk attitude increases as the specificity of the classification algorithm decreases.

scholarly journals Potential Influence of Climate Change on Grain Self‐Sufficiency at the Country Level Considering Adaptation Measures

2019 ◽  
Vol 7 (10) ◽  
pp. 1152-1166 ◽  
Author(s):  
Taoyuan Wei ◽  
Tianyi Zhang ◽  
Xuefeng Cui ◽  
Solveig Glomsrød ◽  
Yu Liu
Keyword(s):  
Climate Change ◽  
Potential Influence ◽  
Adaptation Measures ◽  
Country Level ◽  
Self Sufficiency

Information Fake in Supply Chains

2011 ◽  
Vol 267 ◽  
pp. 958-962
Author(s):  
Jiang Hong
Keyword(s):  
Decision Making ◽  
Supply Chain ◽  
Supply Chains ◽  
Information Management ◽  
Stable Distribution ◽  
Risk Attitude ◽  
Risk Averse ◽  
Stable States ◽  
Stochastically Stable

In this paper, we set risk attitude into decision making research for the supply chain manage. We focus on the information management. We discuss the stable states and the stochastically stable distribution for the fake game in the supply chain. We find there always exist information fake behaviors of low-yield suppliers. And, the less risk averse suppliers are, the more information fake they use.

scholarly journals Effects of Peers and Rank on Cognition, Preferences, and Personality

2020 ◽  
pp. 1-47
Author(s):  
Utteeyo Dasgupta ◽  
Subha Mani ◽  
Smriti Sharma ◽  
Saurabh Singhal
Keyword(s):  
Big Five ◽  
Regression Discontinuity ◽  
Big Five Personality Traits ◽  
Causal Effects ◽  
Big Five Personality ◽  
Risk Averse ◽  
Regression Discontinuity Design ◽  
Selective College ◽  
Selective Colleges ◽  
Economic Preferences

We exploit the variation in admission cutoffs across colleges at a leading Indian university to estimate the causal effects of enrolling in a selective college on cognitive attainment, economic preferences, and Big Five personality traits. Using a regression discontinuity design, we find that enrolling in a selective college improves university exam scores of the marginally admitted females, and makes them less overconfident and less risk averse, while males in selective colleges experience a decline in extraversion and conscientiousness. We find differences in peer quality and rank concerns to be driving our findings.

Loyalty Discounts

2013 ◽  
Vol 13 (2) ◽  
pp. 655-685 ◽  
Author(s):  
Uğur Akgün ◽  
Ioana Chioveanu
Keyword(s):  
Private Information ◽  
Risk Attitude ◽  
Differentiated Products ◽  
Quantity Discounts ◽  
Risk Averse ◽  
Product Substitution ◽  
Market Outcomes ◽  
Wide Range ◽  
Parameter Values ◽  
Pricing Schemes

Abstract This article analyses the use of loyalty inducing discounts in vertical supply chains. An upstream supplier and a competitive fringe sell differentiated products to a retailer who has private information about the stochastic demand. We compare the market outcomes, when the supplier uses two-part tariffs (2PT), all-unit quantity discounts (AU), and market-share discounts (MS). We show that the retailer’s risk attitude affects supplier’s preferences over these pricing schemes. When the retailer is risk neutral, it bears all the risk and the three schemes lead to the same outcome. When the retailer is risk averse, a 2PT performs the worst from the supplier’s perspective, but it leads to the highest welfare. For a wide range of parameter values (but not for all), the supplier prefers MS to AU. By limiting the retailer’s product substitution possibilities, MS makes the demand for the manufacturer’s product more inelastic. This reduces the amount (share of total profits) the supplier needs to leave to the retailer for the latter to participate in the scheme.

Toward Risk-Informed Operation of Autonomous Vehicles to Increase Resilience in Unknown and Dangerous Environments

2016 ◽  
Author(s):  
Zachary Mimlitz ◽  
Adam Short ◽  
Douglas L. Van Bossuyt
Keyword(s):  
Autonomous Vehicles ◽  
Health Management ◽  
Space Exploration ◽  
Autonomous Systems ◽  
Risk Attitude ◽  
Local Area ◽  
Behavioral Risk ◽  
Risk Averse ◽  
Critical System ◽  
Scientific Mission

Operation of autonomous and semi-autonomous systems in hostile and expensive-to-access environments requires great care and a risk-informed operating mentality to protect critical system assets. Space exploration missions, such as the Mars Exploration Rover systems Opportunity and Curiosity, are very costly and difficult to replace. These systems are operated in a very risk-averse manner to preserve the functionality of the systems. By constraining system operations to risk-averse activities, scientific mission goals cannot be achieved if they are deemed too risky. We present a quantifiable method that increases the lifetime efficiency of obtaining scientific goals via the implementation of the Goal-Oriented, Risk Attitude-Driven Reward Optimization (GORADRO) method and a case study conducted with simulated testing of the method. GORADRO relies upon local area information obtained by the system during operations and internal Prognostics and Health Management (PHM) information to determine system health and potential localized risks such as areas where a system may become trapped (e.g.: sand pits, overhangs, overly steep slopes, etc.) while attempting to access scientific mission objectives through using an adaptable operating risk attitude. The results of our simulations and hardware validation using GORADRO show a large increase in the lifetime performance of autonomous rovers in a variety of environments, terrains, and situations given a sufficiently tuned set of risk attitude parameters. Through designing a GORADRO behavioral risk attitude set of parameters, it is possible to increase system resilience in unknown and dangerous environments encountered in space exploration and other similarly hazardous environments.

scholarly journals Dread Aversion and Economic Preferences

2021 ◽  
Author(s):  
Christopher Dawson ◽  
Samuel Gregory Blane Johnson
Keyword(s):  
Decision Making ◽  
Individual Differences ◽  
Survey Data ◽  
Downside Risk ◽  
Risky Choice ◽  
Risk Averse ◽  
Suggestive Evidence ◽  
Novel Approach ◽  
Economic Preferences ◽  
Economic Survey

We are often preoccupied with the future, experiencing dread at the thought of future misery and savoring the thought of future pleasure. Prior lab studies have found that these anticipatory emotions influence decision-making. In this article, using a novel approach, we use economic survey data to estimate individual differences in anticipatory emotions, finding that the tendency to feel displeasure (dread) from anticipating future losses outweighs the pleasure (savoring) from anticipating equal gains—that is, people are dread-averse. We then relate anticipatory emotions to key economic preferences, finding that more dread-averse people are more risk-averse (because they obtain more disutility from contemplating downside risk) and more impatient (because they want to minimize the time spent contemplating risks). We conclude by considering how dread aversion can provide novel explanations for a variety of intertemporal and risky choice phenomena. Dread aversion explains why people are both risk-averse and impatient and provides suggestive evidence as to why these traits are linked.

scholarly journals Do sex hormones at birth predict later-life economic preferences? Evidence from a pregnancy birth cohort study

2020 ◽  
Vol 287 (1941) ◽  
pp. 20201756
Author(s):  
Boris van Leeuwen ◽  
Paul Smeets ◽  
Jeanne Bovet ◽  
Gideon Nave ◽  
Jonathan Stieglitz ◽  
...  
Keyword(s):  
Sex Hormones ◽  
Social Preferences ◽  
Later Life ◽  
Birth Cohort Study ◽  
Phenotypic Characteristics ◽  
Digit Ratios ◽  
Point Estimates ◽  
Equivalence Tests ◽  
Economic Preferences ◽  
Australian Cohort

Economic preferences may be shaped by exposure to sex hormones around birth. Prior studies of economic preferences and numerous other phenotypic characteristics use digit ratios (2D : 4D), a purported proxy for prenatal testosterone exposure, whose validity has recently been questioned. We use direct measures of neonatal sex hormones (testosterone and oestrogen), measured from umbilical cord blood ( n = 200) to investigate their association with later-life economic preferences (risk preferences, competitiveness, time preferences and social preferences) in an Australian cohort (Raine Study Gen2). We find no significant associations between testosterone at birth and preferences, except for competitiveness, where the effect runs opposite to the expected direction. Point estimates are between 0.05–0.09 percentage points (pp) and 0.003–0.14 s.d. We similarly find no significant associations between 2D : 4D and preferences ( n = 533, point estimates 0.003–0.02 pp and 0.001–0.06 s.d.). Our sample size allows detecting effects larger than 0.11 pp or 0.22 s.d. for testosterone at birth, and 0.07 pp or 0.14 s.d. for 2D : 4D ( α = 0.05 and power = 0.90). Equivalence tests show that most effects are unlikely to be larger than these bounds. Our results suggest a reinterpretation of prior findings relating 2D : 4D to economic preferences, and highlight the importance of future large-sample studies that permit detection of small effects.

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