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Identifying shipowners’ risk attitudes over gains and losses: Evidence from the dry bulk freight market

Giamouzi, M. & Nomikos, N. ORCID: 0000-0003-1621-2991 (2020). Identifying shipowners’ risk attitudes over gains and losses: Evidence from the dry bulk freight market. Transportation Research Part E: Logistics and Transportation Review, 145, 10129. doi: 10.1016/j.tre.2020.102129

Abstract

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.

Publication Type: Article
Additional Information: © 2020. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/
Publisher Keywords: Risk Preferences, Prospect Theory, Risk-Return Relationship, Dry-bulk Freight Market, Utility Functions
Subjects: H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HE Transportation and Communications
H Social Sciences > HG Finance
Departments: Bayes Business School > Finance
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