Risk Perception and Comparative Advantage

Risk Perception and Comparative Advantage | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Risk Perception and Comparative Advantage Michel Blanchard, frédéric Peltrault This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-9076008/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract This paper analyzes international trade when managers differ in their perception of risk. Managers choose between a certain activity and a risky entrepreneurial project and evaluate uncertain outcomes according to the dual theory of choice under risk. Differences in the distribution of managerial optimism across countries generate comparative advantage: the relatively optimistic country specializes in the risky commodity, while the more pessimistic country specializes in the certain one. Managerial heterogeneity also modifies the welfare effects of trade. In particular, the pessimistic country may lose from trade even according to an ex-ante welfare criterion, while the optimistic country may experience ex-post welfare losses. JEL Classification: F11; F13; D81. Risk perception Comparative advantage Heterogeneous managers Idiosyncratic risk International trade Welfare Full Text Additional Declarations No competing interests reported. Supplementary Files simulationsblanchard.docx Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-9076008","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":604721596,"identity":"c7934791-7069-44d4-babc-5fd7fe500696","order_by":0,"name":"Michel Blanchard","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAABEUlEQVRIie3PMWvCQBTA8VcC5/KSrFeC/QwnB9cWAn6VF4ROEoQsHTIIglNp1vRbCIJz5ECXlq6dipOTQ0AoDqV4Ke2iSbp2uD+8gzv4cXcANts/TGhgACMgz2wcMxdZtW7MdMb15PabCCD2S54mZiUzWNSTfnFKZsUfRK2d7aYUELPOy3I/St+787W7LCkNAYN6ozS77uUCEobxIMhXiVxob8BpdQfoUQNBFqCAaApD5SCjaKFR8GisoY/1DxMV+ayIvzPki6L5BOWhIthGoCLc3OJOKZo5qHg7YeryQfCE8Z0M3EeSuUZ1Y/6CjeRVb/nhPox9f9jb4wd1s+xZvpVpeNVEfuLnR+3AZrPZbK0dARfiUiF4+MJFAAAAAElFTkSuQmCC","orcid":"","institution":"Inalco University and IFRAE","correspondingAuthor":true,"prefix":"","firstName":"Michel","middleName":"","lastName":"Blanchard","suffix":""},{"id":604721597,"identity":"24b2c255-ce98-425f-aad3-37a62132fb5f","order_by":1,"name":"frédéric Peltrault","email":"","orcid":"","institution":"PSL, Université Paris-Dauphine, LEDa, DIAL UMR 225, PARIS 16, France","correspondingAuthor":false,"prefix":"","firstName":"frédéric","middleName":"","lastName":"Peltrault","suffix":""}],"badges":[],"createdAt":"2026-03-09 18:08:33","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-9076008/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-9076008/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":107483684,"identity":"a72425a7-a54a-45fe-9755-f16e8cfb4c25","added_by":"auto","created_at":"2026-04-22 02:28:48","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":311291,"visible":true,"origin":"","legend":"","description":"","filename":"blanchardpeltraultIEEP.pdf","url":"https://assets-eu.researchsquare.com/files/rs-9076008/v1_covered_06a694d3-893c-4324-901f-6589f2d6977d.pdf"},{"id":104516143,"identity":"9c1c527b-7480-462b-b128-fc1d0a846be4","added_by":"auto","created_at":"2026-03-12 17:37:13","extension":"docx","order_by":1,"title":"","display":"","copyAsset":false,"role":"supplement","size":130746,"visible":true,"origin":"","legend":"","description":"","filename":"simulationsblanchard.docx","url":"https://assets-eu.researchsquare.com/files/rs-9076008/v1/fc08dbc3c02738a104bcb804.docx"}],"financialInterests":"No competing interests reported.","formattedTitle":"Risk Perception and Comparative Advantage","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":true,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"Risk perception, Comparative advantage, Heterogeneous managers, Idiosyncratic risk, International trade, Welfare","lastPublishedDoi":"10.21203/rs.3.rs-9076008/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-9076008/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eThis paper analyzes international trade when managers differ in their perception of risk. 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