Collective risk aversion

In this article we analyze the risk attitude of a group of heterogeneous agents and we develop a theory of comparative collective risk tolerance. In particular, we characterize how shifts in the distribution of individual levels of risk tolerance affect the group’s attitude towards risk. In a model with efficient risk-sharing and two agents an increase in the level of risk tolerance of one or of both agents might have an ambiguous impact on the collective level of risk tolerance; the latter increases for some levels of aggregate wealth while it decreases for other levels of aggregate wealth. For more general populations we characterize the effect of first-order like shifts (individual levels of risk tolerance more concentrated on high values) and second-order like shifts (more dispersion on individual levels of risk tolerance) on the collective level of risk tolerance. We also evaluate how shifts in the distribution of individual levels of risk tolerance impact the collective level of risk tolerance in a framework with exogenous egalitarian sharing rules. Our results permit to better characterize differences in risk taking behavior between groups and individuals and among groups with different distributions of risk preferences.     

Becoming mother and father in late adoption: a case study

Adoption in Brazil has long been related to practices of not disclosing the child's history and origins, which become a family secret. As a consequence, most couples who apply for adoption prefer newborns. Late adoption is still an uncommon practice and requires a 'family project' which accepts a different family model, new meanings of motherhood and fatherhood, and different ways of building affectionate bonds. It is important to investigate how a man and a woman become parents under those circumstances. This study aimed to follow up the emergence of adoption, motherhood and fatherhood meanings, in the discursive practices involved in the construction of adoptive parenthood in the Brazilian setting. This paper presents important meanings regarding parenthood produced by a couple who adopted two sisters, aged 4 and 5 years. Analysis revealed that to better understand the late adoption process, the meanings that emerge in the discursive practices should be considered. Those meanings pervade and circumscribe the family relationships, influencing how the individuals constitute their roles in the family. It is through the analysis of this dialogical process of construction that it is possible to identify the challenges in late adoption and to unravel the process of constructing affectionate relationships.     

Behavioral biases and the representative agent

In this article, we show that behavioral features can be obtained at a group level even if they do not appear at the individual level. Starting from a standard model of Pareto optimal allocations, with expected utility maximizers but allowing for heterogeneity among individual beliefs, we show in particular that the representative agent has an inverse S-shaped probability distortion function as in Cumulative prospect theory.     

The Impact of Health-Related Emotions on Belief Formation and Behavior

We present a theoretical model of health beliefs and behaviors that explicitly takes into account the emotional impact of possible bad news (i.e., illness), ex-ante in the form of anxiety and ex-post in the form of disappointment. Our model makes it possible to explain (simultaneously) a number of anomalies such as ’low’ testing rates, heterogeneous perceptions of risk levels, underestimation of health risk, ostriches and hypochondriacs, over-use and under-use of health services, patient preference for information when relatively certain of not being ill, yet avoiding information when relatively certain of being ill, etc. Our model matches observed patterns both in health beliefs and health behaviors and irrational health beliefs and behaviors can be characterized as the optimal response under a given structure of emotions and preferences.     

Diversity,civic virtues and ecological austerity

A single global culture and a unique set of world institutional arrangements, based on an ever-increasing consumption of natural resources and environmental pollution is not sustainable nor can be sustained. In this paper some key ideological and moral com­ponents of the urgently required changes towards a culture of sustainability are examined, together with the implications, difficulties and requirements for its embodiment both in individual practices and in social institutions. In particular, it is argued that the values and attitudes which promote the protection and integration of diversity—both cultural and biological—and restrain the current trends in natural resource consumption and environmental pollution are to be developed by the citizenry if global societies are to survive. In the domains of political participation, rational dialogue and civic virtue, sustainability is akin to the inherited republican ideals of liberty, equality and fraternity. Sustainability must now become an indispensable fourth moral pillar in the structuration of society and, in particular, in the coming world republican polity, which will necessarily take account of the diversity of cultures and institutions. It is shown that, otherwise, the now developing unsustainable global society would otherwise cease to exist.     

Economic consequences of Nth-degree risk increases and Nth-degree risk attitudes

We study comparative statics of Nth-degree risk increases within a large class of problems that involve bidimensional payoffs and additive or multiplicative risks. We establish necessary and sufficient conditions for unambiguous impact of Nth-degree risk increases on optimal decision making. We develop a simple and intuitive approach to interpret these conditions : novel notions of directional Nth-degree risk aversion that are characterized via preferences over lotteries.