Risky targets and effort

O-Chia Chuang, Louis Eeckhoudt, Rachel Huang and Larry Y. Tzeng

Insurance: Mathematics and Economics, 2013, vol. 52, issue 3, 465-468

Abstract: When decision makers invest in effort to reach their targets, they face multiple sources of risk: first the risk of failure and second the noise that surrounds either the target or the initial situation. In this paper, we examine how effort is adjusted to account for changes in this risky environment.

Keywords: Effort; Increase in risk; Stochastic dominance; Higher-order preferences (search for similar items in EconPapers)
JEL-codes: D81 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:insuma:v:52:y:2013:i:3:p:465-468

DOI: 10.1016/j.insmatheco.2013.02.004

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