In this paper we develop an optimal dividend policy in the presence of limited rational inves-tors. Concretely, investors with mental accounts for dividends and stock prices as well as emotions like disappointment and elation embody the limited rationality. Furthermore, investors evaluate...

In dem vorliegenden Beitrag wird erörtert, wie beschränkte Rationalität auf verschiedene Phasen der Gründungsfinanzierung einwirken kann. Dabei wird konkret die Venture Capital-Finanzierung als wohl bedeutendste Form einer Gründungsfinanzierung der Untersuchung zugrunde gelegt. Für diese...

Since the equity premium as well as the risk-free rate puzzle question the concepts centralto financial and economic modeling, we apply behavioral decision theory to asset pricing in view ofsolving these puzzles. U.S. stock market data for the period 1960-2003 and German stock marketdata for the...

We examine a static one-risk-free-one-risky asset portfolio choice when the investor's wellbeing is affected by the anticipatory feelings associated to potential capital gains and losses. These feelings can be manipulated by the choice of subjective beliefs on the distribution of returns....

We develop a simple model of the exchange rate in which agents optimize their portfolio and use different forecasting rules. They check the profitability of these rules ex post and select the more profitable one. This model produces two kinds of equilibria, a fundamental and a bubble one. In a...

The behavior of boundedly rational agents in two interacting markets is investigated. A discrete-time model of coupled financial and consumer markets is described. The integrated model is then used to investigate feedback effects between the coupled markets. In particular, the influence of the...

This paper reports the results of an experiment on portfolio choice in the presence of nontradeable income. The nontradeable income part could either be riskless or risky (background risk). (...)

Empirical research documents that temporary trends in stock pricemovements exist. Moreover, riding a trend can be a profitable investment strategy. (...)

Previous studies have shown that individuals exhibit a tendency to acquire an excessive amount of private information if information can only be communicated through a small and discrete action space. In this experiment we investigate demand for information when theaction space is continuous. (...)