Baharad, Eyal; Kliger, Doron - In: Theory and Decision 75 (2013) 4, pp. 599-619
This paper merges the non-expected utility approach (Tversky and Kahneman, J Risk Uncertain 5:297–323, <CitationRef … derive the results for different probability weighting functions and analyze the phenomenon of market failure in light of non-expected … utility maximization. Our main finding suggests that when the proportion of traded lemons is high (low), the problem of market …