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service. Yet over half leave within the first year, and cognitive skills are also strong predictors of who exits too early … affect the economic lives of individuals, by systematically changing preferences and choices in a way that favors the …Economic analysis has said little about how an individual's cognitive skills (CS's) are related to the individual …
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We use data on households' deductible choices in auto and home insurance to estimate a structural model of risky choice … weighting. Our estimates indicate that nonlinear probability weighting plays the most important role in explaining the data … the data than standard risk aversion alone, loss aversion alone, and standard risk aversion and loss aversion combined …
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study the asset allocation of a linear loss-averse (LA) investor and compare the optimal LA portfolio to the more … under more realistic assumptions. In particular, we investigate the impact of different dependence structures, which can be … of symmetric (Gaussian copula) or asymmetric (Clayton copula) type. Finally, using 13 EU and US assets, we implement the …
Persistent link: https://www.econbiz.de/10010293995
This paper studies the attitude of non-professional investors towards financial losses and their decisions concerning … which both consumption and financial wealth fluctuations generate utility. The perception of financial wealth is modelled in … subjective reference point and the impact of past performance on the current perception of the risky portfolio value. The …
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We measure individual-level loss aversion using three incentivized, representative surveys of the U.S. population … (combined N = 3,000). We find that around 50% of the U.S. population is loss tolerant, with many participants accepting negative … experienced financial shocks. These results support the general hypothesis that individuals value gains and losses differently …
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