The theory of precautionary saving is shown in this paper to be isomorphic to the Arrow-Pratt theory of risk aversion, making possible the application of a large body of knowledge about risk aversion to precautionary saving, and more generally, to the theory of optimal choice under risk In particular, a measure of the strength of precautionary saving motive analogous to the Arrow-Pratt measure of risk aversion is used to establish a number of new propositions about precautionary saving, and to give a new interpretation of the Oreze-Modigliani substitution effect

Precautionary Saving in the Small and in the Large

Does the period over which individuals evaluate outcomes influence their investment in risky assets? Results from this study show that the more frequently returns are evaluated, the more risk averse investors will be. The results are in line with the behavioral hypothesis of "myopic loss aversion," which assumes that people are myopic in evaluating outcomes over time, and are more sensitive to losses than to gains. The results have relevance for the equity premium puzzle, and also for the marketing strategies of fund managers. (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of t (This abstract was borrowed from another version of this item.)

An experiment on risk taking and evaluation periods

The purpose of this note is to analyze properties of the risk lovers? utility function beyond the positive sign of its second order derivative. We show that??contrarily to a priori beliefs??risk lovers are prudent and are willing to accumulate precautionary savings. (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) ( (This abstract was borrowed from another version of this item.)

Even (mixed) risk-lovers are prudent

Sustainability is an essential goal for companies to pursue alongside their efforts to cope with a period of economic crisis and uncertainty. Technologically mature manufacturing sectors need to preserve their competitiveness, and process and product innovation may no longer be sufficient to stimulate demand. Strategic innovation is one possible option to address this challenge. However, methods to implement this new paradigm are still underexplored. This paper analyzes the Italian and Spanish ceramic tile industries as a prime example of process digitalization and environmental practices in the European manufacturing context. Through the application of multi-criteria analysis, this study aims to investigate the possibilities provided by strategic innovation to companies in this sector, in order to be able to compete with producers in emerging countries who use price strategies as the only lever of their competitiveness. To this end, dimensions relating to operations, market, economy, society and the environment are considered herein. Our results show that the multidimensionality of industrial organizations should stimulate manufacturing firms not only to look at customer needs from a price point of view, but to commit to including social and environmental attributes in their products, such as the green-circular premium and sustainability certification. These two practices represent strategic innovation. This presents a complex challenge involving widespread change that concerns entrepreneurship, management and industrial policies. • Industrial districts enrich socially industrial organization. • Sustainability is an enabler of competitive advantage in manufacturing. • Competitive advantage requires recognition a green-circular premium. • Recognition is based on a sustainability certification by performance classes. • Differential product taxation is a policy to be implemented. 

Green recovery in the mature manufacturing industry: The role of the green-circular premium and sustainability certification in innovative efforts

Risk attitude is known to be a key determinant of various economic and financial choices. Behavioral studies that aim to evaluate the role of risk attitudes in contexts of this type, therefore, require tools for measuring individual risk tolerance. Recent developments in decision theory provide such tools. However, the methods available can be time consuming. As a result, some practitioners might have an incentive to prefer "fast and frugal" methods to clean but more costly methods. In this article, we focus on a tractable procedure initially proposed by Holt and Laury (2002) to elicit risk attitude. We generalize this method to measure utility and risk aversion as follows. First, we allow measurement of probabilistic risk attitude through violations of expected utility due to probability weighting. Second, we use the outcome scale rather than the probability scale in the menu of choices. Third, we compare sure payoffs with lotteries instead of comparing non-degenerate lotteries. A within-subject experimental study illustrates the gains in tractability and bias minimization that can result from such an extension.

Risk aversion elicitation: reconciling tractability and bias minimization

The circular economy and bioeconomy in the fashion sector: Emergence of a “sustainability bias”

This paper sheds light on the importance of considering behavioural aspects when forging energy policies. Trust in both institutions and peers improves pro-social behaviour and, as a consequence, leads to more responsible energy consumption. Data collected from the 8 th round of the European Social Survey were used to build three indexes by which to measure political trust, social trust, and energy-saving habits. The empirical analysis confirms that social and political trust positively affect people’s propensity to reduce domestic energy consumption. Furthermore, the results emphasize how the social context positively impacts citizens’ pro-active role in reducing negative externalities. An interesting corollary concerns the effect of political trust on pro-social behaviour: it is stronger in socio-democratic countries, and virtually non-existent in liberal ones. Overall, government policies should not be based solely on a taxation/subside approach, but effort should be made to enhance the citizen-to-citizen and citizen-to-state interplay.

The less you burn, the more we earn: The role of social and political trust on energy-saving behaviour in Europe

The sun is a shining star in the emerging low-carbon society, providing bright solutions to mitigate climate change. This perspective article presents the results of an online survey that investigated peoples’ willingness to reshape their intraday energy use to both reduce energy consumption (especially from fossil fuel sources) and maximize green energy self-consumption. Respondents identified self-consumption as a key factor in reducing their energy bill. More generally, respondents’ consumption choices appeared largely driven by economic incentives. Hence, the introduction of a bonus for self-consumed energy may enhance the development of photovoltaic systems. From the results a bonus of 4 cent€/kWh and a green premium of 10 cent€/kWh come out. These findings could assist policy makers in forging policy actions based on a mix of monetary and non-monetary incentives to support the development of decentralized energy systems.

Nudging for the increased adoption of solar energy? Evidence from a survey in Italy

Adaptive expectations versus rational expectations: Evidence from the lab

The development of photovoltaic (PV) systems in Southern Europe has been boosted by favourable sunshine levels but also by the policies implemented. Europe's ambitious plans for a green transition require new power to be installed but also new consumption habits that tend to be more responsible. The transformation of cities goes through the emergence of prosumers and the percentage of self-consumption is the variable that determines the profitability of PV systems. This work is based on an online energy survey conducted in two southern European countries (i.e. Italy and Spain), in which both expectations and behaviour of consumers with regards to solar energy are compared between countries. Among other things, interviewees were asked to quantify the introduction of a subsidy for self-consumption. Interestingly, results show an average of 4 cent€/kWh and 3 cent€/kWh for Italy and Spain, respectively. Additionally, the survey allowed eliciting the price subjects believe one ought to pay for both fossil fuel-based and renewable energy, resulting in a green premium of 10 cent€/kWh and 8 cent€/kWh for Italy and Spain, respectively. Finally, the crucial role played by policies in shaping consumers’ perceptions emerged as decisive in fostering the development of PV systems in European countries.

Annarita Colasante

Papers

The circular economy and bioeconomy in the fashion sector: Emergence of a “sustainability bias”

The less you burn, the more we earn: The role of social and political trust on energy-saving behaviour in Europe

Nudging for the increased adoption of solar energy? Evidence from a survey in Italy

Adaptive expectations versus rational expectations: Evidence from the lab

What drives the solar energy transition? The effect of policies, incentives and behavior in a cross-country comparison