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Investors Facing Risk II: Loss Aversion and Wealth Allocation When Utility Is Derived From Consumption and Narrowly Framed Financial Investments
Rengifo, Erick W.; Trifan, Emanuela - 2007
This paper studies the attitude of non-professional investors towards financial losses and their decisions concerning wealth allocation among consumption, risky, and risk-free financial assets. We employ a two-dimensional utility setting in which both consumption and financial wealth...
Persistent link: https://www.econbiz.de/10010266877
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Prospect theory in the financial decision-making process: An empirical study of two Argentine universities
de Guevara Cortés, Rogelio Ladrón; Tolosa, Leticia Eva; … - In: Journal of Economics, Finance and Administrative Science 28 (2023) 55, pp. 116-133
Purpose - This paper aims to provide empirical evidence for using the prospect theory (PT) basic assumptions in the Argentine context. Mainly, this study analysed the financial decision-making process in students of the economic-administrative academic area of two universities, one public and...
Persistent link: https://www.econbiz.de/10014516356
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Prospect Theory and Higher Moments
Ågren, Martin - 2006
The paper relates cumulative prospect theory to the moments of returns distributions, e.g. skewness and kurtosis, assuming returns are normal inverse Gaussian distributed. The normal inverse Gaussian distribution parametrizes the first- to forth-order moments, making the investigation...
Persistent link: https://www.econbiz.de/10010321576
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A Dynamic Model of Investor Decision-Making: How Adaptation to Losses affects Future Selling Decisions
Lee, Carmen; Kraeussl, Roman; Lucas, André; Paas, … - 2008
We conduct an experiment to test whether the size of a loss and the time in a losing position affect investors …
Persistent link: https://www.econbiz.de/10010326067
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Prospect Theory and the Law of Small Numbers in the Evaluation of Asset Prices
Luppi, Barbara - 2005
We develop a model of one representative agent and one asset. The agent evaluates the earnings according to Prospect Theory and he does not know exactly the stochastic process generating earnings. While the earnings are generated by a random walk process, the agent considers a Markovian process,...
Persistent link: https://www.econbiz.de/10011651433
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Einflüsse von kognitiven Verzerrungen auf das Anlageverhalten deutscher Privataktionäre
Hampe, Lena; Rommel, Kai - 2017
only by cognitive biases and social-psychological effects but also by rational behaviour. The subsequent experiment was … this purpose, an experiment with simulated situations of the stock exchange was developed. The subjects of the experiment … the theoretical part and of the experiment can refute an entire rationality of the stock exchange and the investment …
Persistent link: https://www.econbiz.de/10014565194
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The ratio bias phenomenon: fact or artifact?
Lefèbvre, Mathieu; Vieider, Ferdinand M.; Villeval, … - 2009
The ratio bias - according to which individuals prefer to bet on probabilities expressed as a ratio of large numbers to normatively equivalent or superior probabilities expressed as a ratio of small numbers - has recently gained momentum, with researchers especially in health economics...
Persistent link: https://www.econbiz.de/10010277022
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Incentive effects on risk attitude in small probability prospects
Lefèbvre, Mathieu; Vieider, Ferdinand M.; Villeval, … - 2009
prospects in a laboratory experiment. Under low stakes, we find the typical risk seeking behavior for small probabilities …
Persistent link: https://www.econbiz.de/10010277023
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The influence of priming on reference states
Matthey, Astrid - In: Games 1 (2010) 1, pp. 34-52
outcomes of either the individual herself or her reference group. The experiment described in this paper suggests that, in …
Persistent link: https://www.econbiz.de/10010369360
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Bimodal bidding in experimental all-pay auctions
Ernst, Christiane; Thöni, Christian - In: Games 4 (2013) 4, pp. 608-623
We report results from experimental first-price, sealed-bid, all-pay auctions for a good with a common and known value. We observe bidding strategies in groups of two and three bidders and under two extreme information conditions. As predicted by the Nash equilibrium, subjects use mixed...
Persistent link: https://www.econbiz.de/10010369399