This paper studies the wealth and pricing implications of loss aversion in the presence of arbitrageurs with Epstein …-Zin preferences. Loss aversion affects an investor's survival prospects mainly through its effect on the investor's portfolio holdings …. Loss-averse investors will be driven out of the market and do not affect long-run prices if their portfolio positions are …

This paper considers a general-equilibrium model with loss-aversion in consumption and heterogeneity: there is a … discrete number of agents. Loss-aversion in consumption induces a kink in the pricing kernel and consequently, jumps in the … market price of risk, stock return, and volatility. An economy populated with only loss-averse agents produces one counter …

. Researchers have drawn implications from loss aversion to understand various aspects of individual decisions and asset prices in … financial markets. At the current stage, some ancillary assumptions have been made in deriving these implications. Loss aversion … affects financial markets through affecting the risk attitudes of market participants. Taken as a whole, loss aversion is a …

Purpose - The current study aims to investigate the impacts of two behavioral biases, namely, loss aversion and … overconfidence on the performance of US companies. First, the impact of loss aversion on the economic performance of companies was … study. Findings - It was documented that the loss-aversion bias negatively affects the economic performance of companies and …