The popularity of KiwiSaver, combined with a demographic shift to an ageing population, will make savings invested in KiwiSaver an important source of income in retirement. To investigate the investment fund choices by KiwiSaver members a survey was circulated among 134 people; 87 KiwiSaver members, and 47 non-members. Respondents answered questions on their investment behavior, knowledge, and risk attitudes towards investment in general, and KiwiSaver. The results show investment in KiwiSaver tends to be conservative as a result of low levels of involvement, knowledge, and risk tolerance, and is more common among females. Investment in riskier growth funds is mostly by younger people and those who are risk tolerant as measured by the KiwiSaver Risk Profile.

This thesis deals with the perceptions of agroforestry among farmers in Babati, north- central Tanzania. The focus is on which resources farmers perceive that they need to adopt agroforestry and which risks that are connected with agroforestry adoption. It is also to see how farmers perceive that the access to resources changes after agroforestry adoption and how their livelihoods change. The data has been collected through qualitative interviews with agroforestry farmers, conventional farmers and extension officers. After that the data has been analyzed through the sustainable livelihood approach and a risk perception theory. The results show that some of the obstacles or risks that farmers perceive with agroforestry adoption are high input costs, dependency on short-term benefits, competition between trees and crops and lack of education from extension services. Without financial capital and human capital in terms of knowledge there might be too many risks connected with adoption. If agroforestry however is adopted the farmers perceive that the access to firewood, timber and fruits increase which increase their incomes and therefore financial capital. They also perceive that the fruits improve food security and that the timber improves the housing. The firewood is also perceived to improve the situation for women as they do not have to walk as far to collect the firewood. Agroforestry is also perceived to provide environmental services like erosion prevention and increased soil fertility, therefore it increases natural capital. Some trees can also be used as natural pesticides. The increased soil fertility or the access to natural pesticides, however does not seem to affect the use of industrial fertilizers or pesticides. Agroforestry is also not perceived to have any effects on biodiversity or water quality. Even if agroforestry may not be a good choice for all farmers, it can for some farmers increase their ability to cope with stress and shocks like future climate change. This is because the agroforestry system can work as a buffer against increased climatic variability.

This paper attempts to provide experimental evidence on fire prevention and risk aversion among urban informal settlers using lottery choice data with real monetary prizes. The paper estimates the risk attitudes of a sample of 174 individuals from an informal housing development in Cape Town. The empirical analysis is performed within the expected utility theory specification, assuming constant relative risk aversion (CRRA) defined over the lottery prize. We tests the hypothesis that risk averse individuals will take precautionary measures in as far as possible to mitigate the risk of fire to their household. We find that individual-level fire prevention measures that are within the means of the households to effect, such as making sure that matches, lighters and paraffin are kept out of reach of children, is correlated with risk aversion, but measures, such as building of homes at least 3-5 meters from the neighbours, does not seem to be within the choice set of low-income informal dwellers. Our results further indicate that subjects who engage in fire prevention/fire safety strategies that require the "most effort" (that are most effective and costly) are significantly more risk averse relative to subjects engaging in fire safety measures that need "least effort". Contrary to expectation, distance from the main road, informal electricity connection, and the use of paraffin for lighting, heating and cooking are not correlated with risk aversion, indicating that irrespective of the risk profiles of decision makers, low-income households are often forced to make choices that increase their exposure to fire hazards.

In the area of transportation policy, congestion pricing has been used to alleviate traffic congestion in metropolitan areas. The focus of Chapter 1 is to examine drivers’ perceived risk of traffic delay as one determinant of reactions to congestion pricing. The experiment reported in this essay recruits commuters from the Atlanta and Orlando metropolitan areas to participate in a naturalistic experiment where they are asked to make repeated route decisions in a driving simulator. Chapter 1 examines belief formation and adjustments under an endogenous information environment where information about a route can be obtained only conditional on taking the route. If the subjects arrive to the destination late, i.e. beyond an assigned time threshold, they are faced with a discrete (flat) penalty. In contrast, Chapter 2 examines subjective beliefs in a setting where the penalty for a late arrival is continuous, such that a longer delay incurs additional penalty on the driver. The primary research question is: does belief formation differ when the late penalty is induced as a continuous amount compared to when it is induced as a discrete amount? In particular, will we observe a difference in learning across the range of congestion probabilities under different penalty settings? In the continuous penalty setting, we do not observe a difference in learning across the range of congestion probabilities. In contrast, in the discrete penalty setting we observe significant belief adjustments in the lowest congestion risk scenario. In Chapter 3 the “source method” is used to examine how uncertainty aversion differs across events that have the same underlying objective probabilities but are presented under varying degrees of uncertainty. Subjects are presented with three lottery tasks that rank in order of increasing uncertainty. Given the choices observed in each task a source function is estimated jointly with risk attitudes under different probability weighting specifications of the source function. Results from the Prelec probability weighting suggest that, as the degree of uncertainty increases, subjects display increased pessimism; in contrast, the Tversky-Kahneman (1992) and the Power probability weightings detect no such difference. Thus, the conclusion regarding uncertainty aversion are contingent on which probability weighting specification is assumed for the source function.

Cette thèse est composée d’un essai sur la relation entre l’aversion au risque des individus et leur décision de migration et de deux essais sur l’importance de sauver la face et la réciprocité en termes d’image.Le premier essai s’appuie sur une expérience de terrain en Chine afin d’étudier si le statut migratoire est corrélé aux préférences en matière de risque, ambiguïté et compétitivité. Il montre que les migrants et les non-migrants ne présentent pas de différences dans leurs préférences concernant le risque et l’ambiguïté dans des loteries standard. En revanche, les migrants ont une attitude plus compétitive face à une incertitude stratégique dans un jeu d’entrée sur un marché.Le deuxième essai étudie si les individus sont prêts à sacrifier des ressources pour sauver la face en payant pour éviter l'exposition publique du membre de leur groupe le moins productif à l’aide d’une expérience de laboratoire à effort réel. La majorité des individus sont prêts à payer pour préserver à la fois leur image et celle des autres. Ce résultat est robuste à une manipulation de l'identité de groupe. Le sentiment de honte toujours présent à la suite d’une exposition publique évince la motivation intrinsèque.Le troisième essai étudie la récompense de la bienveillance et la punition de l’égoïsme en termes d'image. Il montre que les individus récompensent la bienveillance et expriment de la réciprocité vis-à-vis de ceux qui ont préservé leur image ou celle d’un tiers. En revanche, l’égoïsme de ceux qui ne font pas d’effort pour sauver la face des autres n’est pas sanctionné. / This thesis consists of one essay on the relationship between risk attitudes and migration and two essays investigating the importance of saving face and reciprocity in terms of social image.The first essay is based on a field experiment conducted in China to study whether the migration status is correlated with one's preferences regarding risk, ambiguity, and competitiveness. It shows that migrants and stayers exhibit no difference in their preferences over risk and ambiguity as elicited with standard lottery choices. In contrast, migrants are significantly more likely to enter competitive markets in the context of strategic uncertainty. The second essay studies whether individuals forego resources to avoid the public exposure of the worst performer in their group in a real-effort laboratory experiment. A majority of individuals are willing to pay to preserve both self- and others’ image. This finding is robust to a manipulation of group identity. While the threat of exposure encourages effort, public exposure and a feeling of shame crowd out future intrinsic motivation.The third essay investigates whether individuals reward kindness and punish selfishness in terms of image. It shows that people reward kindness and reciprocate to people who have saved their face or others’ face. However, selfish behavior in terms of image saving is not sanctioned.

<p>Diss. Stockholm : Handelshögsk.</p>

Risk attitudes are important for human decision making, especially in scenarios where huge wins or losses are possible, as exemplified by planetary rover navigation, oilspill response, and business applications. Decision-theoretic planners therefore need to take risk aspects into account to serve their users better. However, most existing decision-theoretic planners use simplistic planning objectives that are risk-neutral. The thesis research is the first comprehensive study of how to incorporate risk attitudes into decision-theoretic planners and solve large-scale planning problems represented as Markov decision process models. The thesis consists of three parts. The first part of the thesis work studies risk-sensitive planning in case where exponential utility functions are used to model risk attitudes. I show that existing decision-theoretic planners can be transformed to take risk attitudes into account. Moreover, different versions of the transformation are needed if the transition probabilities are implicitly given, namely, temporally extended probabilities and probabilities given in a factored form. The second part of the thesis work studies risk-sensitive planning in case where general nonlinear utility functions are used to model risk attitudes. I show that a state-augmentation approach can be used to reduce a risk-sensitive planning problem to a risk-neutral planning problem with an augmented state space. I further use a functional interpretation of value functions and approximation methods to solve the planning problems efficiently with value iteration. I also show an exact method for solving risk-sensitive planning problems where one-switch utility functions are used to model risk attitudes. The third part of the thesis work studies risk sensitive planning in case where arbitrary rewards are used. I propose a spectrum of conditions that can be used to constrain the utility function and the planning problem so that the optimal expected utilities exist and are finite. I prove that the existence and finiteness properties hold for stationary plans, where the action to perform in each state does not change over time, under different sets of conditions.

The present study aims to contribute to insurance sector by investigating the risk reduction mechanisms: self-insurance, self-protection, and market insurance. First, individual valuations/demands for these mechanisms in fire and earthquake events are analyzed through conducting an experiment to 78 students from Middle East Technical University In addition, the effects of risk attitude, personality traits, and demographic variables (that are measured through using a questionnaire) on valuations to these precautionary actions&rsquo / are examined. The findings show that, consistent with the theory, self-insurance and market insurance are substitutes to each other / contrary to the theory, self-protection and market insurance are not complements, they are also substitutes to each other. Further, individuals prefer self-protection and self-insurance to market insurance for both fire and earthquake events. Lastly, individual investment attitude is found to affect the valuations of these three risk reduction mechanisms positively concluding that people perceive these mechanisms as an investment tool.

Risk is inherent in many social and economic decisions, such as the choice of pathway in secondary school, the choice of major at university, job decisions, health-related behaviour, marriage, parenthood, migration and the allocation of financial assets. Investigating the determinants of attitudes towards risk is therefore essential to fully understand how people make such decisions. Recent research has shown that individual risk attitudes are not immutable personality traits, but are influenced by external factors with the potential to change them in more or less enduring ways, such as the characteristics of the environment, emotional states, life experiences such as poverty, job loss or violence, and social relationships. This thesis studies external factors that play a role in shaping risk attitudes. Specifically, it focuses on two important environmental factors: social relationships and the incentive structure that individuals face (e.g., competition or teamwork). It is composed of three chapters. Each chapter of the thesis presents the results of a different laboratory experiment, in which individual risk behaviour is always measured using the Bomb Risk Elicitation Task - BRET (Crosetto and Filippin, 2013). This task asks participants to choose how many boxes to collect out of 100, knowing that 99 boxes contain £0.10 while one contains a bomb, but without knowing in which box the bomb is located. They can therefore choose their preferred lottery among 100 lotteries whose outcomes and probabilities are fully described only by one parameter, i.e., the number of collected boxes. Earnings increase linearly with the number of boxes collected, but they are all lost if the bomb lies in one of the collected boxes. In the first two chapters, risk behaviour is measured both before and after the treatment manipulation, and feedback on the peers’ ex-ante risk behaviour is used as a channel to study peer influence on the subjects’ ex-post risk behaviour. The first two chapters provide new evidence that individual risk behaviour is influenced by the risk behaviour of the peer group and offer one explanation for why peer effects are not always present and vary in intensity. This is due to the fact that individuals are more influenced by those peers with whom they feel more bonded. Specifically, in the first chapter I study how group identity (that is, the portion of an individual’s self-concept derived from the sense of belonging to the social group) affects peer effects on risk behaviour. I induce different levels of group identity through different matching protocols (random or based on individual painting preferences) and the possibility of interacting with group members via an online chat in a group task. I find that subjects are affected by their peers when taking decisions and that a stronger group identity amplifies the influence of peers: painting preferences matching significantly reduces the heterogeneity of risk behaviour compared with random matching. On the other hand, introducing a group task has no significant effect on behaviour, possibly because this interaction does not always contribute to enhancing group identity. The second chapter digs deeper into this evidence by investigating the role of the incentive structure that characterizes the individuals’ environment. Since the first chapter shows that peer effects vary in intensity, I hypothesize that different types of incentive schemes may have different effects on peer relationships and, therefore, affect peer effects on risk behaviour. Using a real effort task, which consists of recognizing the value and the country of origin of a random sequence of Euro coins, I compare piece-rate compensation first with a cooperation-based and then with a competition-based incentive scheme. I find that competition significantly reduces attachment to peers and more than halves peer influence on risk behaviour compared with piece-rate compensation, despite the fact that the latter effect is not statistically significant. Such findings suggest that, when designing and evaluating an optimal compensation scheme, it may be important to also consider how peer effects on subsequent risk behaviour will in turn affect future decisions involving risk. For example, in research and development, competition may improve the results of current projects, but risk attitudes will shape the types of future projects that are attempted. The third chapter restricts the attention to competition and enquires whether this type of incentive scheme has a direct effect on risk-taking behaviour, beyond any social comparison, and whether its impact on subsequent risk behaviour is heterogeneous according to gender. Risk behaviour is measured after the performance of a real effort task, consisting of recognizing the value and country of origin of Euro coins, incentivized either as a tournament with fixed rewards or as a random draw with the same monetary payoffs. The data show that competition does not significantly affect subsequent risk-taking behaviour when considering the full sample. However, there is a positive relationship between competition and risk aversion for males, who become significantly more risk-averse after losing a competition than after randomly earning the same low payoff. In contrast, males do not become more risk-seeking after winning the tournament, while the average risk-taking behaviour of females is unaffected by tournament participation and outcomes. The reaction of males to negative outcomes might be driven by intrinsic motives, such as emotions or a shift in the locus of control from internal to external. Overall, the evidence presented here shows that risk attitudes are not immutable but may be shaped by external factors. Of particular importance is the role played by the risk behaviour of peers, which begins to emerge even when bonds are weak and becomes stronger as the social link intensifies. Any policy that aims to change risk attitudes (or that does so indirectly) will thus see its effects spread to the target subjects’ peers, and may amplify its success if the peer group is chosen wisely. Changing the characteristics of the subjects’ environment by introducing competition weakens their attachment to the competing peers and may attenuate peer effects on risk behaviour. In addition, competition per se has no impact on subsequent risk behaviour, except for males who become more risk-averse after losing.

Cette thèse aborde la question de la fiabilité du temps de transport. L’étude de la fiabilité du temps de transport trouve ses sources dans le fait que, dans bien des situations, le temps de transport n’est pas certain, mais aléatoire. De nombreux évènements peuvent en effet modifier le temps de transport prévu par les opérateurs ou espéré par les usagers. Par ailleurs, lors de l’évaluation socioéconomique de projets d’investissement en infrastructure de transport, il peut exister un arbitrage entre gain de temps et gain de fiabilité. Or, comme la fiabilité est encore à l’heure actuelle, difficilement intégrable dans ce type d’évaluation, ces projets d’investissement voient leur rentabilité collective sous-estimée conduisant à leurs reports. Il émerge ainsi trois problématiques majeures relatives à l’étude de la fiabilité du temps de transport : sa mesure, sa valorisation monétaire (i.e. la disposition à payer des individus pour améliorer la fiabilité du temps de transport) et enfin, sa prise en compte dans les analyses coûts-avantages. Un premier chapitre permet d’adapter les mesures usuelles de la fiabilité du temps de transport appliquées dans le cadre du transport routier, aux modes de transport collectif (fer et aérien plus particulièrement). Nous proposons également une nouvelle mesure de la fiabilité, le Delay-at-Risk (DaR) inspiré de la littérature financière. Le DaR est une transposition de la mesure de la Value-at-Risk (V aR) à l’économie des transports. Cette mesure est plus utile du point de vue des usagers pour la planification des trajets avec correspondance que les autres mesures. Le deuxième chapitre a pour principal objectif de déterminer la disposition à payer des individus pour améliorer la fiabilité du temps de transport. Nous proposons un cadre théorique inspiré de la théorie de la décision en univers risqué à partir duquel nous définissons la préférence des individus à l’égard de la fiabilité (i.e. reliabilityproneness) ainsi que la prudence. Nous développons des nouvelles mesures de la fiabilité du temps de transport, exprimées comme des primes de risque : la reliability-premium et la V OR. La reliability-premium détermine le temps de transport maximum supplémentaire qu’un individu est prêt à accepter pour supprimer l’intégralité du risque sur le temps de transport. La V OR, quant à elle, se définit comme la disposition maximale à payer d’un individu pour supprimer l’intégralité du risque sur le temps de transport. Par ailleurs, nous établissons également les conséquences sur la valeur du temps (V TTS) et de la fiabilité (V OR), de la prise en considération de l’attitude à l’égard du risque sur le temps de transport des usagers (aversion et prudence). Le dernier chapitre de cette thèse a pour objet d’intégrer la fiabilité dans les évaluations socioéconomiques de projet d’investissement et plus particulièrement dans la détermination du surplus des usagers. Nous mettonsen exergue un effet de diffusion des gains de fiabilité par rapport aux gains de temps. Ainsi, nous proposons des recommandations quant à l’arbitrage entre les projets générateurs de gain de temps et de gain de fiabilité en fonction des valeurs monétaires du temps (V TTS) et de la fiabilité (V OR). / This thesis deals with the issue of travel time reliability. The study of travel time reliability emerges from the fact that in many situations, travel time is random. Many events can change the travel time forecasted by operators or expected by users. Moreover, a tradeoff may exist between time and reliability benefits when evaluating socio economic appraisal of transport infrastructure. However, since reliability is still difficult to integrate in this type of evaluation, investment projects’ collective profitability is underestimated and often postponed. Thus, three main issues of travel time reliability analysis emerge: measurement, monetary valuation and implication for cost benefit analysis. This thesis is organized in three chapters. The first chapter adapts the measure of travel time reliability typically used in the road transport context to the collective modes (rail and air, in particular). We also develop a new reliability measure: the Delay-at-Risk (DaR). DaR is an implementation of the Value-at-Risk (V aR) measure into the transport economic framework. The DaR seem to be relevant and understandable information for the users, especially to plan their travel and avoid missing their connections. The main objective of the second chapter is to define the users’ willingness to pay to improve travel time reliability. We present a theoretical framework based on decision theory under risk. We introduce the concept of reliability-proneness (i.e. travel time risk aversion) and prudence. We develop new measures of travel time reliability expressed as risk premium: the reliability-premium and V OR. The reliability-premium is the maximum amount of additional travel time that an individual is willing to accept to escape all the risk of travel time. The V OR is defined as the maximum monetary amount that an individual is willing to pay to escape all the risk of travel time. Furthermore, we also establish the link with attitudes towards risks of travel time (aversion and prudence) and the impact of the value of travel time (V TTS) and the value of reliability (V OR). The final chapter of this thesis integrates reliability in investments project’s socioeconomic appraisal. More particularly, it allows to determine users’ surplus valuation. We highlight a diffusion effect of reliability benefits with regard to travel time benefits. Thus, we propose recommendations regarding the tradeoff between projects that generate time benefits compared with reliability benefits, according to the monetary values of travel time(V TTS) and reliability (V OR).