performance, together influence the decision to hold on to or to capitulate on an investment. We study the relative contribution … decision to capitulate an investment, however, only depends directly on the expectation about the stock’s future performance …. The adaptation level, by contrast, affects the actual investment decision indirectly via its impact on expectations. …

We provide an explanation why centralisation of political decision makingresults in overspending in some policy domains …

these two variants to play. Theory predicts that subjects will choose the payoff dominated game (representing a bad explicit …