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Gneezy, U., List, J. A., & Wu, G. (2006). The Uncertainty Effect: When a Risky Prospect Is Valued Less Than Its Worst Possible Outcome. The Quarterly Journal of Economics, 121, 1283-1309.
https://doi.org/10.1093/qje/121.4.1283

has been cited by the following article:

• TITLE: Disproportionate Safety Preference and the Innovation of Fintech Shadow Banking

  AUTHORS: Hammad Siddiqi

  KEYWORDS: Fintech Shadow Banks, Certain Utility, Uncertain Utility, Securitization

  JOURNAL NAME: Theoretical Economics Letters, Vol.12 No.3, June 9, 2022

  ABSTRACT: There has been a dramatic shift in financial intermediation in the last 10 - 15 years from traditional banks to shadow banks (non-depository institutions that rely on originate-to-distribute lending model). We link this rise to an emerging literature that shows that certain and uncertain utility functions are different with a disproportionate preference for certainty. We show that such a preference plays a role in diverting lending away from the traditional banking model to the shadow banking model. Furthermore, a low interest-rate environment emerges as the key contributing factor in the dramatic rise of shadow banking.