We propose a new asset pricing model which generalizes the mean-variance framework by including probability weighting, specifically the overweighting of rare, high-impact events. Our model—the Π-CAPM—allows for disentangling volatility and skewness effects and predicts that idiosyncratic...

This online appendix (OA) contains proofs and additional results to the paper Ebert and Karehnke (2021) “Skewness Preferences in Choice under Risk.” Online Appendix OA.1 shows the proofs of the results in the main text. Online Appendix OA.2 studies behavioral implications of the orders of...

Many economic and financial decisions depend crucially on their timing. People decide when to invest in a project, when to liquidate assets, or when to stop gambling in a casino. We provide a general result on prospect theory decision makers who are unaware of the time-inconsistency induced by...

Many of the most significant risks that people face in their lives are left-skewed, i.e., imply large losses with only small probability. I characterize skewness in binary risks, which are widely applied in both economic models and experiments. Moreover, I provide an explicit re-parametrization...

This article gives a comprehensive treatment of preferences regarding time risk—the risk of something happening sooner or later—within the expected discounted utility model. We characterize the signs of the discount function’s derivatives of all orders and show how these signs are decisive...

In der vorliegenden Studie wird eine Analyse von 22 Beteiligungsprozessen zur Klimaanpassung in Deutschland durchgeführt, um Empfehlungen für verbesserte Beteiligungsverfahren zu entwickeln. Vier Hauptdimensionen werden betrachtet: Beteiligungsziele, Beteiligte, Beteiligungsmethoden und...

Within the classical real option setting, we show that disagreement or uncertainty about what discount rate to use leads to delayed investment and more risk-taking. We connect with the behavioral economics literature and present the most comprehensive analysis of the impact of time preferences...