Erev, Ert, and Roth organized three choice prediction competitions focused on three related choice tasks: one shot decisions from description (decisions under risk), one shot decisions from experience, and repeated decisions from experience. Each competition was based on two experimental...

In a given period, a diversified fund, by virtue of being a weighted average, will perform somewhere in the middle range of its components' respective performances. This means that adaptive investors who look to the past to adjust expectations about future returns will shun diversified funds....

Economics

Three experiments are presented that compare alternative explanations to the coexistence of risk aversion and under-diversification in investment decisions. The participants were asked to select one of several assets under two feedback conditions. In each case, one asset was a weighted...

Timing and frequency of punishment are critical elements in law enforcement. Previous studies suggest the superiority of immediate punishment schemes over delayed punishment, as well as the importance of frequent punishment. Yet law enforcement schemes which utilize both frequent and immediate...

Mainstream explanations to gambling specify conditions under which human agents are locally risk loving. Such theories, however, fail to explain the typically observed prize distribution of a few large prizes and a large number of medium ones--hence the medium prizes paradox. In the current...