Prospect theory has found an increasing attention in many fields of economics. However, it has scarcely been addressed in a macroeconomic growth model. In an earlier paper we introduced prospect theory into a stochastic growth model. This paper focuses on linking the Euler equation induced by...

We study the influence of systematic probability misestimation on complexfinancial investment decisions on the context of structured financialproducts. Structured products have in recent years become more and morecomplex. We study the question whether this complexity might be a...

Evolutionary nance studies the dynamic interaction of investment strategies in nancialmarkets. This market interaction generates a stochastic wealth dynamics on aheterogenous population of traders through the uctuation of asset prices and theirrandom payos. Asset prices are endogenously...

We study how the framework of classical game theory changes whenthe preferences of the players are described by Prospect Theory (PT)and Cumulative Prospect Theory (CPT) instead of Expected UtilityTheory. Specically, we study the inuence of framing eects and probabilityweighting on the existence...