We study portfolio diversification in an experimental decision task, where asset returns depend on a draw from an ambiguous urn. Holding other information identical and controlling for the level of ambiguity, we find that labeling assets as being familiar or from the homeland of subjects...

We extend the original form of Prospect Theory by Kahneman and Tversky from finite lotteries to arbitrary probability distributions, thus paving the way for applications in economics and finance. Moreover, we suggest a method how to incorporate a crucial step of the quot;editing phasequot; into...

In an experiment on a subjective claims problem we compare three unanimity bargaining procedures - the Demand, the Offer and the Exit variant - in terms of fairness and efficiency. To assess the fairness of the allocations obtained by these procedures, we evaluate them from a partial point of...

We find that in cumulative prospect theory (CPT) with a concave value function in gains, a lottery with finite expected value may have infinite subjective value. This problem does not occur in expected utility theory. The paradox occurs in particular in the setting and the parameter regime...

We examine time discounting factors in an international survey. Our analysis reveals a significant relationship between time discount factors and historical equity premiums across 27 countries. This result implies that higher historical equity risk premiums are observed in countries where survey...

This article jointly analyses a behavioural and a cultural concept to explain household debt portfolio choice. The behavioural approach explores the role of time preferences on household debt maturity in a theoretical model and a numerical analysis. We derive a positive relationship between the...

We study stock market reactions to large international military conflicts since World War II. Using a news analysis proxy for the estimated likelihood that a conflict will result in a war, we find that an increase in the war likelihood tends to decrease stock prices, but the ultimate outbreak of...

This paper examines the investment strategies of regulated companies in irreversible abatement technologies and the environmental achievements of the system in an inter-temporal cap-and-trade market using laboratory experiments. The experimental analysis is performedunder varying market...

There is a rich body of literature studying the effects of Mega-events (i.e., major sporting spectacle and cultural events) on economic development and environmental improvements in the host cities. Evidences are also found that Mega-events can enhance national pride and bring other intangible...

The impact of the Olympic Games on the hosting cities has been the topic of a rich body of literature with mixed findings. The research topic is a challenging undertaking due to the scale of the event itself and the complexity of the preparation for the event. The Beijing 2008 Olympic Games is...