Economics, Econometrics and Finance
8 years ago

Greater risk aversion leads to more investment in uncertain ventures.

Cahiers de recherche
Risk Aversion and Incentives
Marie‐Cécile Fagart, Claude Fluet

Paper Summary

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The article explores how people's fear of taking risks affects their decisions when it comes to investing money or spending on safety measures. The researchers found that more risk-averse individuals tend to invest more or less, depending on the situation. They also discovered that different levels of risk aversion can impact how people respond to financial incentives in a work setting.