The present study reviews the literature about dynamic decision-making and judgment of low-probability, high-consequence events. The specific features of this situation under risk and uncertainty imply an anomaly: while the single probability of an event with high negative consequences may be...

To investigate the effect of time horizon on investment behavior, this paper reports the results of an experiment in which business graduate students provided certainty equivalents and judged various dimensions of the outcome distribution of simple gambles that were played either once or...

We analyze in this paper the effect of age on the optimal dynamic strategy toward repeated independent gambles. When deciding to accept or to reject a lottery that is offered today, the gambler knows how many lotteries can yet be played in the future. We first characterize the optimal dynamic...