Hamo, Y.; Heifetz, A. - Foerder Institute for Economic Research, Eitan Berglas … - 2001
Maximizing the probability of bypassing an aspiration level, and taking increasing risks to recover previous losses are well-documented behavioral tendencies. They are compatible with individual utility functions that are S-shaped, as suggested in Prospect Theory (Kahneman and Tversky 1979). We...