Suchergebnisse

1. Introduction -- 2. The Meaning of Risk -- 3. Different Disciplines -- 4. The Notion of Risk-Taking -- 5. Key Characteristics of Risk-Taking -- 6. Negotiating Social Forces -- 7. Responsibilisation: Blaming or Empowering Risk-Taking -- 8. Reasonable Risk-Taking in Everyday Life -- 9. Conclusions and Perspectives

Judgement and decision making are essential functions of the cognitive system. The present paper exposes key elements of the psychological theory which best accounts for human decision making. Decision making can be a flawed process. Loss aversion, framing effects, and differences across individuals are presented to highlight the irrational aspect of human risk taking. We reveal evidence of various cognitive distortions as compared to normalised decisions. It has been shown that expertise acquisition can compensate part of these cognitive distortions. Yet, recent evidence shows that experts in different civilizations retain civilizational risk propensities. Such evidence thus challenges the notion that knowledge is sufficient for perfect rationality in decision making; throwing the idea that politics is served by informed individuals making rational decisions under a severe cloud. The consequences of flawed human decisions regarding risk taking at a grand scale and by educated individuals is discussed. It is demonstrated that risk tolerance in different civilizations leads to different actions. This basic phenomenon is used to demonstrate how powerful states may misread potential reactions of less powerful states, which historically, can and has led to costly wars. Understanding the opponents' psychology is a well-known factor for chess players, which, so far, has not been explored much in political psychology.

This thesis addresses the dynamics of high-risk unauthorised migration. First, it explores how new routes develop in relation to policies that seek to curtail unauthorised migration. Second, it analyses how aspiring migrants justify taking certain risks to migrate by negotiating risk information in relation to their life circumstances and considering the symbolic value of specific forms of migration. Finally and, in relation to the previous, the thesis discusses whether policies that seek to curtail unauthorised migration flows by increasing the likelihood of migrants' apprehension and repatriation are likely to be effective. In order to explore these questions, this thesis project focuses on the specific case of unauthorised boat migration from West Africa to the Canary Islands, Spain. This route emerged in the year 2006 in relation to increased border control activities along the Strait of Gibraltar and between Morocco and the Canary Islands. In opening a direct link between Sub-Saharan Africa and Europe, the new route from West Africa to the Canary Islands provoked a major change in the dynamics of irregular maritime migration to Spain's southern borders. Both the number of sub-Saharan migrants arriving on the shores of the Canaries and the length of the itinerary they had followed were unprecedented, and arose much astonishment at the ostensibly very high risks migrants appeared willing to take in order to reach Europe. While it has been argued that migrants following perilous unauthorised migration routes do so out of misinformation about the risks they face, this thesis argues that the relationship between risk information and risk-taking is significantly more complex. Decisions to migrate through high-risk channels are mediated by factors such as aspiring migrants' options for socio-economic advancement, the social and moral acceptability of certain migration forms and the risks they involve, the religious significance of death, and migrants' perceptions of their relative preparedness to, and ability to control, the risks they may face. Migration control measures aimed at curtailing unauthorised migration, such as risk awareness campaigns, border patrolling and repatriation are likely to be ineffective if they are based on a simplistic understanding of unauthorised migration dynamics. Careful design of border control measures is necessary to ensure their effectiveness in curbing unauthorised migration flows and upholding their humanitarian concern with protecting the lives of migrants.

Entrepreneurs bear substantial risk, but empirical evidence shows no sign of a positive premium. This paper develops a theory of endogenous entrepreneurial risk taking that explains why self-financed entrepreneurs may find it optimal to invest in risky projects offering no risk premium. Consistently with empirical evidence, the model predicts that poorer entrepreneurs are more likely to undertake risky projects. It also finds that incentives for risk taking are stronger when agents are impatient. (JEL G31, G32, L25, L26)

I propose a dynamic general equilibrium model in which strategic interactions between banks and depositors may lead to endogenous bank fragility and slow recovery from crises. When banks' investment decisions are not contractible, depositors form expectations about bank risk-taking and demand a return on deposits according to their risk. This creates strategic complementarities and possibly multiple equilibria: in response to an increase in funding costs, banks may optimally choose to pursue risky portfolios that undermine their solvency prospects. In a bad equilibrium, high funding costs hinder the accumulation of bank net worth, leading to a persistent drop in investment and output. I bring the model to bear on the European sovereign debt crisis, in the course of which under-capitalized banks in default-risky countries experienced an increase in funding costs and raised their holdings of domestic government debt. The model is quantified using Portuguese data and accounts for macroeconomic dynamics in Portugal in 2010- 2016. Policy interventions face a trade-o¤ between alleviating banks' funding conditions and strengthening risk-taking incentives. Liquidity provision to banks may eliminate the good equilibrium when not targeted. Targeted interventions have the capacity to eliminate adverse equilibria. ; The ADEMU Working Paper Series is being supported by the European Commission Horizon 2020 European Union funding for Research & Innovation, grant agreement No 649396.

I propose a dynamic general equilibrium model in which strategic interactions between banks and depositors may lead to endogenous bank fragility and slow recovery from crises. When banks' investment decisions are not contractible, depositors form expectations about bank risk-taking and demand a return on deposits according to their risk. This creates strategic complementarities and possibly multiple equilibria: in response to an increase in funding costs, banks may optimally choose to pursue risky portfolios that undermine their solvency prospects. In a bad equilibrium, high funding costs hinder the accumulation of bank net worth, leading to a persistent drop in investment and output. I bring the model to bear on the European sovereign debt crisis, in the course of which under-capitalized banks in default-risky countries experienced an increase in funding costs and raised their holdings of domestic government debt. The model is quantified using Portuguese data and accounts for macroeconomic dynamics in Portugal in 2010-2016. Policy interventions face a trade-off between alleviating banks' funding conditions and strengthening risk-taking incentives. Liquidity provision to banks may eliminate the good equilibrium when not targeted. Targeted interventions have the capacity to eliminate adverse equilibria.