Pharmacological studies point to a role of the neurotransmitter serotonin (5-HT) in regulating the preference for risky decisions, yet the functional contribution of specific 5-HT receptors remains to be clarified. We used pharmacological fMRI to investigate the role of the 5-HT2A receptors in processing negative outcomes and regulating risk-averse behavior. During fMRI, twenty healthy voluntee...

This paper argues that moderate unemployment insurance not only reduces the uncertainty faced by risk-averse workers but also improves efficiency and raises output. We develop a model in which the decentralized equilibrium is inefficient without unemployment insurance, because the labor market endogenously creates jobs that provide risk-averse workers with low unemployment risk and low wages. E...

the conventional theory of adverse selection is not supported by most of the empirical works. these studies conclude that low-risk individuals demand more insurance services than high-risks. they refer to this situation as advantageous selection theory. this theory states that loss ratio of insureds may be lower than the population loss ratio while the conventional theory of adverse selection c...

This paper examines Chinese students’ risk attitude using buying and selling experiments with lotteries. We found that subjects were more risk averse in the buying experiment than in the selling experiment, suggesting the endowment effect. In the selling experiment, subjects were risk loving when there was a low win probability and risk averse with a high win probability, whereas they were risk...

We analyse the all-pay auction with incomplete information and variance-averse bidders. We characterise the symmetric equilibrium for general distributions of valuations and any number of bidders. Variance aversion is a sufficient assumption to predict that high-valuation bidders increase their bids relative to the risk-neutral case while low types decrease their bid. Considering an asymmetric ...

Westudy independent private-value all-pay auctionswith risk-averse players. We show that: (1) Players with low values bid lower and players with high values bid higher than they would bid in the risk neutral case. (2) Players with low values bid lower and players with high values bid higher than they would bid in a first-price auction. (3) Players’ expected utilities in an all-pay auction are l...

Uncertainty is inherent in bioprocess modelling and control. Typically, uncertainties are handled using either the stochastic approach or robust approach. Recently, risk-averse approach, i.e., an interpolation between worst-case gaining popularity. Risk-averse formulations very useful avoiding conservative solutions while still handling high-effect, low-probability events. In bioreactor case co...