We examine experimentally the effect of complexity on individual decision making. We focus on credit choices, as they have been widely criticized for their complexity in recent years. In a first study, we find that complexity in benefits leads to random mistakes, while complexity in costs leads...

Declining welfare systems increase the importance of self-determination in pension decisions. Thus, the stability of long-life consumptions markedly relies on the individual long-range planning attitude. Our paper investigates how behavioural components affect this attitude, by observing in...

In this paper, we link Joseph de la Vega's work Confusion de Confusiones, written in 1688, with current behavioral finance and propose that Vega be considered the first precursor of modern behavioral finance. In addition to describing excessive trading, overreaction and underreaction, and the...

By comparing the trading behavior of individual investors in different market conditions, this paper tests the theory that attribution bias - inflated confidence in one's own skill - creates overconfident traders. In a bull market, investors incorrectly attribute trading successes (luck) to...

We develop a tractable model of realization utility that studies the role of reference-dependent S-shaped preferences in a dynamic investment setting with reinvestment. Our model generates both voluntarily realized gains and losses. It makes specific predictions about the volume of gains and...