Many psychology experiments show that individually judged probabilities of the same event can vary depending on the partition of the state space (a framing effect called partition-dependence). We show that these biases transfer to competitive prediction markets in which multiple informed traders...

Because inventory systems are managed or heavily influenced by decision makers, understanding human behaviors in inventory management has become an important research topic. Based on newsvendor decisions, in the literature, it has been argued that a few methods (e.g., ex-post inventory error,...

This paper investigates the risk and return properties of a trading strategy for the cryptocurrency market. The main predictive power for portfolio formation comes from a simple prospect theory model that only uses price information readily available. The dataset consists of a large body of...

Most predictions can be partitioned into two components: the predicted outcome, and the chance that one considers the outcome will happen. We studied how people evaluate predictions with binary outcomes. These predictions can be conveyed in two equivalent ways: one predicting an outcome with...

Using Thailand stock market data, we find that prospect theory has strong predictive power for returns in the Thailand stock market. This predictive power is strengthened during crises and bear and bull markets. The loss aversion component is the main contributor to the increased predictive...