Handbook of behavioral economics - foundations and applications 1

Front Cover -- Handbook of Behavioral Economics - Foundations and Applications 1 -- Copyright -- Contents -- Contributors -- Introduction to the Series -- Preface -- 1 Reference-Dependent Preferences -- 1 Introduction -- 2 Expected Utility -- 2.1 Overview and some history -- 2.2 The EU model and risk aversion -- 2.3 Some issues for EU -- 3 Reference-Dependent Preferences -- 3.1 Overview and some history -- 3.2 Risky choice and the value function -- 3.3 Riskless choice -- 3.4 Editing and mental accounting -- 4 Applications with Exogenous Reference Points -- 4.1 Endowment effect -- 4.2 Labor supply -- 4.3 Other forms of effort provision -- 4.4 Finance -- 4.5 Coding and bracketing in applications -- 5 Expectations-Based Models -- 5.1 Overview and some history -- 5.2 Formulation of the expectations-based referent -- 5.3 What determines expectations? -- 5.3.1 Exogenous expectations and surprise choice -- 5.3.2 Endogenous expectations induced by choice -- 5.3.3 Endogenous expectations induced by planned choice -- 5.4 Applying expectations-based models -- 6 Applications of Expectations-Based Models -- 6.1 Endowment effect -- 6.2 Labor supply -- 6.3 Job search -- 6.4 Consumer choice and market prices -- 6.5 Mechanism design: auctions -- 6.6 Mechanism design: optimal contracting -- 7 Reference-Dependent "News" Utility -- 7.1 Overview and some history -- 7.2 News utility -- 7.3 News utility and decision making -- 7.4 Applications of news utility -- 8 Probability Weighting -- 8.1 Overview and some history -- 8.2 Simple nonlinear probability weighting -- 8.3 Rank-dependent probability weighting -- 8.4 RDPW vs. CPE -- 8.5 Tests of rank dependence -- 9 Discussion -- References -- 2 Psychology-Based Models of Asset Prices and Trading Volume -- 1 Introduction -- 2 Empirical Facts -- 2.1 Aggregate asset classes -- 2.2 The cross-section of average returns.