Jeffrey R. Brown, Chichun Fang, Francisco Gomes, Monday, March 23, 2015 - 00:00

Christine L. Exley, Saturday, December 27, 2014 - 00:00

Jean-Pierre Landau, Tuesday, December 2, 2014 - 00:00

Dennis Reinhardt, Cameron McLoughlin, Ludovic Gauvin, Wednesday, November 5, 2014 - 00:00

Graham Loomes, Ganna Pogrebna, Saturday, August 2, 2014 - 00:00

Researchers use various measures of individual risk attitudes to help explain a wide variety of economic behaviours, including investment decisions and firms’ entry and exit decisions. This column presents recent evidence showing that such measures are very context-specific and need to be used with caution, since the very same people can sometimes appear to be risk taking and sometimes appear to be risk averse, depending on the specific measure used. These discrepancies may arise because people have imprecise preferences under risk, and their responses are liable to be influenced by the particular methods used to elicit them.

Peter Koudijs, Hans-Joachim Voth, Saturday, April 12, 2014 - 00:00

Human behaviour in times of financial crises is difficult to understand, but critical to policymaking. This column discusses new evidence showing that personal experience in financial markets can dramatically change risk tolerance. A cleanly identified historical episode demonstrates that even without losses, negative shocks not only modify risk appetite, but can also create ‘leverage cycles’. These, in turn, have the potential to make markets extremely fragile. Remarkably, those who witnessed this episode but were not directly threatened by it, did not change their own behaviour. Thus, personal experience can be a powerful determinant of investors’ actions and can eventually affect aggregate instability.

Maurizio Michael Habib, Livio Stracca, Friday, February 28, 2014 - 00:00

At the peak of the Global Crisis, the US dollar appreciated and US Treasury yields fell, suggesting that foreign investors were purchasing US assets in general. Actually, they were fleeing only into short-term Treasury bills. This column discusses recent research showing that there are indeed no securities which are consistently a safe haven across different crisis episodes – not even US assets. However, a peculiarity of the US securities is that foreign investors do not necessarily ‘run for the exit’, even when a crisis has its epicentre in the US.

Alison Booth, Patrick Nolen, Lina Cardona Sosa, Monday, February 20, 2012 - 00:00

Some blame women’s under-representation in high-level jobs on differences between the sexes in risk aversion and competition. But are these differences in behaviour hardwired or learned? This column describes a study that tackles this thorny question with a controlled experiment in single-sex and mixed classrooms in a British university. Women are found to become far less nervous about uncertainty over time with the men out of the room.

Alison Booth, Lina Cardona Sosa, Monday, February 6, 2012 - 00:00

Some blame women’s under-representation in high-level jobs on differences between the sexes in risk aversion and competitiveness. But are these differences in behaviour hardwired or learned? The authors of CEPR DP8690 tackled this thorny question with a controlled experiment in single-sex and co-educational classrooms. Women, they find, become far less timorous about uncertainty with the men out of the room.

Graziella Bertocchi, Costanza Torricelli, Marianna Brunetti, Saturday, March 13, 2010 - 00:00

Does marriage make people less averse to risk? This column argues that this is the case for women, but not for men. But married women's different attitude towards risk has fallen over time as the prevalence of marriage in society has faded. For women who work, marriage makes no difference.

Alison Booth, Monday, September 14, 2009 - 00:00

Women are underrepresented in high-paying jobs and upper management. Is that due to gender differences in risk aversion and facing competition? This column describes an experiment in which girls were found to be as competitive and risk-taking as boys when surrounded by only girls. This suggests cultural pressure to act as a girl could explain gender differences that are not innate.

Anton Brender, Emile Gagna, Florence Pisani, Tuesday, July 21, 2009 - 00:00

The crisis has broken the close correlation between differences in expected interest rates and the euro-dollar exchange rate. This column attributes that to the sharp increase in risk aversion triggered by the collapse of Lehman Brothers. It argues that fluctuations in risk aversion explain the path followed by the euro-dollar exchange rate since the beginning of the financial crisis.

Anne Sibert, Monday, May 18, 2009 - 00:00

Greedy bankers are getting most of the blame for the current financial crisis. This column explains bankers did behave badly for mainly three reasons. They committed cognitive errors involving biases towards their own prior beliefs; too many male bankers high on testosterone took too much risk, and a flawed compensation structure rewarded perceived short-term competency rather than long-run results.

CEPR Policy Research