Evidence from hypothetical scenarios strongly suggests the existence of a sunk cost bias, the tendency to ‘throw good … psychological channels underlying such a bias is scarce. We present a laboratory experiment designed to investigate the sunk cost … bias and to test some prominent psychological mechanisms. Inspired by the hypothetical scenarios, we use a two …

a fatal conceptual problem for the capital asset pricing model (CAPM), which assumes a unique common horizon for all … investors. We show that under the standard assumptions, the theoretical CAPM equilibrium surprisingly holds with the 1-period …