We propose a simple model of decision making under risk inspired by the "half-full, half-empty" glass metaphor. The model is intuitive in that it is closely related to the expected value criterion and its parameters have a clear behavioral interpretation, and parsimonious in that it provides an...

In this paper we introduce a new, analytically tractable model for decision-making under risk in which psychological characteristics related to the degree of optimism or pessimism of the decision-maker are considered. The model we propose, which is based on a two-parameter optimism weighting...

In this paper, we extend the model presented by Duffie et al. [2007], assuming that the agents pay the transaction costs, when trading assets in over the counter market. First of all, we determine a formula of equilibrium price, depending on transaction costs, and analyze the formula when...