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.     

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.     

Is There a “Pessimistic” Bias in Individual Beliefs? Evidence from a Simple Survey

It is an important issue for economic and finance applications to determine whether individuals exhibit a behavioral bias toward pessimism in their beliefs, in a lottery or more generally in an investment opportunities framework. In this paper, we analyze the answers of a sample of 1,540 individuals to the following question “Imagine that a coin will be flipped 10 times. Each time, if heads, you win $10\texttt{C}\!\!\!\rule[2.3pt]{.4em}{.3pt}\!\!\rule[3.3pt]{.4em}{.3pt}It is an important issue for economic and finance applications to determine whether individuals exhibit a behavioral bias toward pessimism in their beliefs, in a lottery or more generally in an investment opportunities framework. In this paper, we analyze the answers of a sample of 1,540 individuals to the following question “Imagine that a coin will be flipped 10 times. Each time, if heads, you win . How many times do you think that you will win?” The average answer is surprisingly about 3.9 which is below the average 5, and we interpret this as a pessimistic bias. We find that women are more “pessimistic” than men, as are old people relative to young. We also analyze how our notion of pessimism is related to more general notions of pessimism previously introduced in psychology.     

The Politics of Childhood and Asylum in the UK

This article considers the general treatment of asylum‐seeking families with children in the UK, focusing on the government's practices and public reactions to these measures. It first describes both the exclusive asylum framework, based on institutionalised suspicion, welfare restrictions and detention, and the inclusive child policy framework, based on recognising children's rights and protecting all children. The article then investigates the implications for policy‐making that these radically opposed regimes have for those who fall between the two categories, i.e. asylum‐seeking children. To this end, we examine more closely three asylum practices — Section 9 of the Asylum and Immigration (Treatment of Claimants, etc.) Act 2004, detention of accompanied asylum‐seeking children in immigration removal centres and removals. Our analysis indicates that the government's attempt to fully include families within the restrictive asylum framework has been somewhat frustrated by the mobilisation of a wide range of public actors. As such, despite its supposedly ‘legally unconstrained’ room for action, the government has recently agreed to partly review its policy standards for asylum‐seeking families, apparently aware of the potentially damaging effects of being seen as disregarding children's rights and needs. On the other hand, the government does not seem inclined to question the current asylum framework and the assumptions on which it is based. Consequently, the asylum system for families is likely to remain based on ad hocarrangements conditioned by the scale of the protests.     

Approaching Adoption and Foster Care in Brazil

Adoption and foster care have recently undergone various changes in Brazil. Nonetheless, there is a lack of official research data on children who have been adopted or have been living in foster families or institutions. In this paper, after a brief account of the historical aspects of adoption and foster care in Brazil, we focus our discussion on two major points: (1) the difficulties in promoting a “new culture of adoption,” which would develop in “the child's best interest,” and (2) the meanings and prejudices related to late adoption that increase the number of children who remain for many years in institutions.