This paper presents two models of investment in health which explicitly recognize the random nature of illness and death. The first model examines life-cycle behavior of investment and health capital when the motive for investing in health is to decrease the probability of illness. In the second model the individual invests in health through his choice of occupation. This determines the extent of his exposure to a pollutant, such as asbestos, which increases the probability of death. The model examines how exposure to pollution should vary with age and predicts how workers should respond to information about occupational dangers.

Subjective and estimated objective winning probabilities are obtained from 20,247 harness horse races. It is shown that subjectively a horse with a low winning probability is exaggerated and one with a high probability of winning is depressed. Various hypotheses characterizing the bettors' behavior to explain the observed subjective-objective probability relation are explored. Under some simplified assumptions, a utility of wealth function of a decision maker is derived, and a quantitative summary measure of his risk attitude is defined. Attitude toward risk of a representative bettor is examined. It is found that he is a risk lover and tends to take more risk as his capital dwindles.

Because transactions costs are smaller for allocating new cash flows than for reallocating existing asset holdings, financial flow variables are important determinants of investors' short-run asset demands. The demand-for-bonds equations implied by the resulting "optimal marginal adjustment" model of portfolio behavior constitute the demand side of a structural supply-demand model of the determination of the long-term interest rate. Empirical results, based on demand-for-bonds equations estimated using U.S. data for six major categories of bond market investors, support the optimal marginal adjustment model and show that the associated structural model of interest rate determination, which is restricted by the underlying demand-for-bonds equations, fits the data about as well as do previously developed unrestricted reduced-form term-structure equations.

Subjective and estimated objective winning probabilities are obtained from 20,247 harness horse races. It is shown that subjectively a horse with a low winning probability is exaggerated and one with a high probability of winning is depressed. Various hypotheses characterizing the bettors' behavior to explain the observed subjective-objective probability relation are explored. Under some simplified assumptions, a utility of wealth function of a decision maker is derived, and a quantitative summary measure of his risk attitude is defined. Attitude toward risk of a representative bettor is examined. It is found that he is a risk lover and tends to take more risk as his capital dwindles.

Reviews the book "Tax Research Techniques," by Ray M. Sommerfeld and G. Fred Streuling.

Comments on a study which used the decision style model of cognitive complexity to test whether complex integrative decision styles prefer more complex information input and use more information in decision making than cognitively low decision styles. Inconsistencies in the interpretations of results; Flaws in the empirical equivalents used.