Universität zu Köln

Doerrenberg, Philipp, Duncan, Denvil and Zeppenfeld, Christopher (2015). Circumstantial risk: Impact of future tax evasion and labor supply opportunities on risk exposure. J. Econ. Behav. Organ., 109. S. 85 - 101. AMSTERDAM: ELSEVIER. ISSN 1879-1751

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Abstract

This paper examines whether investment in a risky asset depends on future circumstances. We conduct a laboratory experiment where subjects have the opportunity to invest earned income in a risky asset and, depending on randomly assigned treatment states, have the opportunity to respond to the outcome of the investment through extra labor effort and/or tax evasion. We find evidence that ex-post access to labor opportunities decreases ex-ante risk-taking, while access to tax evasion has no effect. Having both opportunities leads to lower risk-taking, but this effect is not statistically significant. We explore the channels behind these results with two additional treatments and find that our results are driven by background risk rather than flexibility. (C) 2014 Elsevier B.V. All rights reserved.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Doerrenberg, Philipp UNSPECIFIED UNSPECIFIED UNSPECIFIED Duncan, Denvil UNSPECIFIED UNSPECIFIED UNSPECIFIED Zeppenfeld, Christopher UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-417311
DOI:	10.1016/j.jebo.2014.11.005
Journal or Publication Title:	J. Econ. Behav. Organ.
Volume:	109
Page Range:	S. 85 - 101
Date:	2015
Publisher:	ELSEVIER
Place of Publication:	AMSTERDAM
ISSN:	1879-1751
Language:	English
Faculty:	Unspecified
Divisions:	Unspecified
Subjects:	no entry
Uncontrolled Keywords:	Keywords Language PORTFOLIO CHOICE; AVERSION; HORIZON Multiple languages Economics Multiple languages
URI:	http://kups.ub.uni-koeln.de/id/eprint/41731