Behavioral Biases and Firm Behavior : Evidence from Kenyan Retail Shops
Many subjects in lab experiments exhibit small-stakes risk aversion, consistent with loss aversion. Those with greater math skills are less likely to show small-stakes risk aversion. We argue that departures from expected utility maximization may help explain why many firms in developing countries leave high expected return investments unexploited. We show that among a sample of Kenyan shopkeepers, inventories are negatively associated with small-stakes risk aversion and positively associated with math skills.
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| Main Authors: | , , , |
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| Format: | Journal Article biblioteca |
| Language: | en_US |
| Published: |
American Economic Association
2013-05
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| Subjects: | firm behavior, risk, uncertainty, life cycle models, saving, capital budgeting, manufacturing, service industries, |
| Online Access: | http://hdl.handle.net/10986/17930 |
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