The behavior of boundedly rational agents in two interacting markets is investigated. A discrete-time model of coupled financial and consumer markets is described. The integrated model is then used to investigate feedback effects between the coupled markets. In particular, the influence of the...

This paper reports the results of an experiment on portfolio choice in the presence of nontradeable income. The nontradeable income part could either be riskless or risky (background risk). (...)

Empirical research documents that temporary trends in stock pricemovements exist. Moreover, riding a trend can be a profitable investment strategy. (...)

Previous studies have shown that individuals exhibit a tendency to acquire an excessive amount of private information if information can only be communicated through a small and discrete action space. In this experiment we investigate demand for information when theaction space is continuous. (...)

(...) We provide support for the disposition effect. Participants who experience a gain sell their assets more rapidly than participants who experience a loss, and positively framed subjects generally sell their assets later than negatively framed subjects.

In this paper the authors experimentally test overconfidence in investment decisions by ordering participants the possibility to substitute their own for alternative investment choices.

This paper focuses on egocentric biases in financial decisions. Subjects first design a portfolio, whereby each combination of assets yields the same expected return and variance of returns. (...)

In this paper the authors measure the risk attitudes of bond investors which can be revealed from settled market prices. They present an equilibrium model which focuses on the stochastic behavior of tastes in addition to the dynamics of investor beliefs.