TY - JOUR
T1 - Identifying shipowners’ risk attitudes over gains and losses
T2 - Evidence from the dry bulk freight market
AU - Giamouzi, Maria
AU - Nomikos, Nikos K.
N1 - Funding Information:
The authors would like to thank the Co-Editor in Chief (Professor Qiang Meng), the Associate Guest Editor (Professor Manolis Kavussanos), three anonymous reviewers, and also participants of the International Association of Maritime Economists (IAME) Conference, Athens, Greece, 2019 for their constructive comments and suggestions. This research was partly conducted when the first author was a Research Fellow at the London School of Economics.
Publisher Copyright:
© 2020 Elsevier Ltd
Copyright:
Copyright 2020 Elsevier B.V., All rights reserved.
PY - 2021/1/31
Y1 - 2021/1/31
N2 - This study examines the risk-return trade-off in the dry bulk freight market under different scenarios such as risk measures, risk attitudes and controlling for variables associated with the freight rate cycle. For long-term contracts, there exists a negative association between risk and return, suggesting that shipowners are willing to offer a discount on time-charter rates over spot rates to compensate for the loss of flexibility. Additionally, shipowners are not uniformly risk averse, as finance theory suggests, since their utility functions are concave (risk-averse) for losses and convex (risk-seeking) for gains.
AB - This study examines the risk-return trade-off in the dry bulk freight market under different scenarios such as risk measures, risk attitudes and controlling for variables associated with the freight rate cycle. For long-term contracts, there exists a negative association between risk and return, suggesting that shipowners are willing to offer a discount on time-charter rates over spot rates to compensate for the loss of flexibility. Additionally, shipowners are not uniformly risk averse, as finance theory suggests, since their utility functions are concave (risk-averse) for losses and convex (risk-seeking) for gains.
KW - Dry Bulk freight market
KW - Prospect Theory
KW - Risk preferences
KW - Risk-Return relationship
KW - Utility functions
UR - http://www.scopus.com/inward/record.url?scp=85097857185&partnerID=8YFLogxK
U2 - 10.1016/j.tre.2020.102129
DO - 10.1016/j.tre.2020.102129
M3 - Article
AN - SCOPUS:85097857185
VL - 145
JO - Transportation Research Part E: Logistics and Transportation Review
JF - Transportation Research Part E: Logistics and Transportation Review
SN - 1366-5545
M1 - 102129
ER -