This paper provides new evidence on individual preferences over annuities and lump sum payments based on hypothetical questions posed in the DNB Household Survey in 2005. Contrary to the majority of papers in the annuitization puzzle literature, this study allows to control explicitly for the...

This paper provides new evidence on individual preferences over annuities and lump sum payments based on hypothetical questions posed in the DNB Household Survey in 2005. Contrary to the majority of papers in the annuitization puzzle literature, this study allows to control explicitly for the...

This paper is designed to review the empirical literature on the excess returns puzzle: the difficulty encountered by standard risk premium models in accounting for relative returns in the foreign exchange market. Of particular interest are the studies using survey data to decompose ex post...

This paper tests the ex ante implications of Frydman and Goldberg's Imperfect Knowledge Economics (IKE) gap model in such a way as to overcome the endogeneity bias and data restrictions of previous work. The IKE gap model relates the expected excess return (measured here through survey data for...

This review considers two explanations for behavioral decision-making in reference to the certainty and framing effects. The findings from various paradigms such as a single questionnaire, gambles with repetition, and gambles guided by feedback are explained either by prospect theory or by...

Combining meaning, memory, and development, the perennially popular topic of intuition can be approached in a new way. Fuzzy-trace theory integrates these topics by distinguishing between meaning-based gist representations, which support fuzzy (yet advanced) intuition, and superficial verbatim...

We hypothesized that framing possible outcomes of decisions in terms of gains vs. losses should increase the salience of information that is incongruent in valence (counter-regulation principle: gain frame – negativity bias, loss frame – positivity bias). These incongruent attentional biases...

This paper tests whether utility is the same for risk and for uncertainty. This test is critical for models that capture ambiguity aversion through a difference in event weighting between risk and uncertainty, like the multiple priors models and prospect theory. We present a new method to...

Deviations from normality in financial return series have led to the development of alternative portfolio selection models. One such model is the downside risk model, whereby the investor maximizes his return given a downside risk constraint. In this paper we empirically observe the...

Risk aversion—but also the higher-order risk preferences of prudence and temperance—are fundamental concepts in the study of economic decision making. We propose a method to jointly measure the intensity of risk aversion, prudence, and temperance. Our theoretical approach is to define risk...