Aggregate uncertainty, disappointment aversion and the business cycle

We investigate the eff ect of aggregate uncertainty shocks on real variables. More speci fically, we introduce a shock in the volatility of productivity in an RBC model with long-run volatility risk and preferences that exhibit generalised disappointment aversion. We find that, when combined with a negative productivity shock, a volatility shock leads to further decline in real variables, such as output, consumption, hours worked and investment. For instance, out of the 2% decrease in output as a result of both shocks, we attribute 0.25% to the e ffect of an increase in volatility. We also fi nd that this e ffect is the same as the one obtained in a model with Epstein-Zin- Weil preferences, but higher than that of a model with expected utility. Moreover, GDA preferences yield superior asset pricing results, when compared to both Epstein-Zin-Weil preferences and expected utility.

Asset Pricing in a Production Economy with Chew–Dekel Preferences

In this paper we provide a thorough characterization of the asset returns implied by a simple general equilibrium production economy with Chew–Dekel risk preferences and convex capital adjustment costs. When households display levels of disappointment aversion consistent with the experimental evidence, a version of the model parameterized to match the volatility of output and consumption growth generates unconditional expected asset returns and price of risk in line with the historical data. For the model with Epstein–Zin preferences to generate similar statistics, the relative risk aversion coefficient needs to be about 55, two orders of magnitude higher than the available estimates. We argue that this is not surprising, given the limited risk imposed on agents by a reasonably calibrated stochastic growth model.

Does uncertainty cause inertia in decision making? An experimental study of the role of regret aversion and indecisiveness

Previous research has shown that often there is clear inertia in individual decision making---that is, a tendency for decision makers to choose a status quo option. I conduct a laboratory experiment to investigate two potential determinants of inertia in uncertain environments: (i) regret aversion and (ii) ambiguity-driven indecisiveness. I use a between-subjects design with varying conditions to identify the effects of these two mechanisms on choice behavior. In each condition, participants choose between two simple real gambles, one of which is the status quo option. I find that inertia is quite large and that both mechanisms are equally important.

Disappointment and disgust, or teaching?

Is 'disappointment' and 'the teaching of disgust' the core of TV Studies? Or might teaching better be accomplished by inspiring positive civic action. Either way, doesn't reality TV do it better? John Hartley uses examples from reality TV to discuss this question.

Inequality Aversion and Performance in and on the Field

The experimental literature and studies using survey data have established that people care a great deal about their relative economic position and not solely, as standard economic theory assumes, about their absolute economic position. Individuals are concerned about social comparisons. However, behavioral evidence in the field is rare. This paper provides an empirical analysis, testing the model of inequality aversion using two unique panel data sets for basketball and soccer players. We find support that the concept of inequality aversion helps to understand how the relative income situation affects performance in a real competitive environment with real tasks and real incentives.

O que faz do conselheiro Aires um cético?

Há um consenso nos meios crítico e acadêmico de que Joaquim Maria Machado de Assis é o maior ficcionista brasileiro. Além da qualidade inegável, sua ficção é notável por sua dimensão, atingindo uma dezena de romances e mais de duzentos contos. Com esta união singular entre extensão e qualidade, a obra machadiana acumulou a maior fortuna crítica no Brasil e uma das maiores da literatura universal. Ainda assim, sua fortuna é a que mais cresce no Brasil. Diante de tamanha dedicação dos estudiosos, em que seria relevante a apresentação de mais uma dissertação sobre o Bruxo do Cosme Velho? Acreditando que, apesar do tamanho da investigação que já se fez sobre Machado, alguns dos aspectos cruciais da vida e da obra do escritor ainda não foram devidamente elucidados, este trabalho nasce com a intenção de contribuir para a diminuição dessa lacuna. Um desses aspectos é o conteúdo filosófico da ficção machadiana. Durante muitas décadas, a ideia de que Machado de Assis se alinhara filosoficamente ao pessimismo foi hegemônica. Entretanto, muitas características da ficção machadiana, tais como o humour e a ironia, podem ser sinais de outra orientação filosófica: o ceticismo. A identificação entre Machado e ceticismo não é, entretanto, algo novo, mas durante a maior parte do tempo, a crítica identificou o ceticismo de Machado com a acepção popular do termo: descrença no campo metafísico e desengano no campo político-social. Este modo de ver o ceticismo acaba por aproximar o termo, e reaproximar Machado de Assis, ao pessimismo. Por outro lado, há algumas décadas, alguns estudiosos brasileiros começaram a verificar que a filosofia da ficção machadiana estaria de fato associada ao ceticismo, mas a outro tipo de ceticismo, o ceticismo pirrônico ou filosófico, iniciado com Pirro de Elis, filósofo grego que viveu entre 360 e 270 a.C., e estabelecido pelos escritos de Sexto Empírico, filósofo e médico do século 2. Fazendo jus à origem grega do termo skepticós, aquele que investiga, o ceticismo pirrônico prima não pela descrença, mas pela busca contínua da verdade. Esta busca se mantém indeterminada em virtude da limitação dos sentidos e do pensamento humanos. Não podemos alcançar a verdade das coisas, mas apenas descrever como elas aparentam. Esta impossibilidade não conduz o pirrônico ao pessimismo, o conduz, ao contrário, à tranquilidade, pois ele aceita a sua limitação, não fica se debatendo contra ela. Na ficção machadiana, o conselheiro Aires é o personagem cético por excelência, a começar pelo tão famoso tédio à controvérsia. Entretanto, apesar da semelhança entre a ficção de Machado de Assis e a filosofia cética, há um problema a ser enfrentado: como o escritor poderia ter criado um personagem tão próximo do pirronismo se Machado nunca chegou a ler uma página de Sexto Empírico?

Values and actions in aversion

Model-based and model-free controllers can, in principle, learn arbitrary actions to optimize their behavior, at least those actions that can be expressed and explored. Indeed, these are often referred to as instrumental controllers because their choices are learned to be instrumental for the delivery of desired outcomes. Although this flexibility is very powerful, it comes with an attendant cost of learning. Evolution appears to have endowed everything from the simplest organisms to us with powerful, pre-specified, but inflexible alternatives. These responses are termed Pavlovian, after the famous Russian physiologist and psychologist Pavlov. The responses of the Pavlovian controller are determined by evolutionary (phylogenetic) considerations rather than (ontogenetic) aspects of the contingent development or learning of an individual. These responses directly interact with instrumental choices arising from goal-directed and habitual controllers. This interaction has been studied in a wealth of animal paradigms, and can be helpful, neutral, or harmful, according to circumstance. Although there has been less careful or analytical study of it in humans, it can be interpreted as underpinning a wealth of behavioral aberrations. © 2009 Elsevier Inc. All rights reserved.

Museums and youth: between misunderstanding and disappointment. Youth perceptions and arguments about the cultural consumption of museums in Chile

Young people are less explored in museum audience research; this is a paradoxical situation when considering its strategic location in the cultural reproduction and if considering the high performing cultural consumption compared with other sectors. The phenomenon of museums consumption by young Chileans who are self recognized as public and non-public museums is explored from a qualitative approach. It was conducted with focus groups in the three largest cities in Chile (Santiago, Valparaíso and Concepción). They identify the museum as a cultural institution in full force. However, in questioning museums activity youth reveal the specificity of their cultural matrix. This is referred to a social temporality based on the fragment, the discourse of familiarity, proximity and instead of breaking and critical. They claim a museum aesthetic / historical experience based on pleasure and enjoyment. An overview is proposed to further clarify the youth cultural consumption to characterize more precisely the place of the museum in the set, to design more effective policies museums.

An Ambiguity Aversion Framework of Security Game under Ambiguities

Security is a critical concern around the world. Since resources for security are always limited, lots of interest have arisen in using game theory to handle security resource allocation problems. However, most of the existing work does not address adequately how a defender chooses his optimal strategy in a game with absent, inaccurate, uncertain, and even ambiguous strategy profiles' payoffs. To address this issue, we propose a general framework of security games under ambiguities based on Dempster-Shafer theory and the ambiguity aversion principle of minimax regret. Then, we reveal some properties of this framework. Also, we present two methods to reduce the influence of complete ignorance. Our investigation shows that this new framework is better in handling security resource allocation problems under ambiguities.

A Survey Measure of Risk Aversion

We Use Survey Data on the Well-Being of Individuals to Measure Attitude Toward Risk. Risk Neutrality Cannot Be Rejected by the Data.