portfolio optimization under loss aversion. If the reference point is exogenously given, then the predictions of any such model … determined, then loss aversion would not affect choice behavior, which is in violation of the empirical evidence. We thus … itself in a lower degree of loss aversion. We then propose two novel models of reference point formation: A model of a …

In this paper we empirically test if loss-aversion affects household participation in equity markets, household … obtain direct measures of each surveyed household's loss-aversion coefficient from questions involving hypothetical payoffs …. We find that higher loss-aversion is associated with a lower probability of participation. We also find that higher loss …