Showing 1 - 10 of 18
Financial well-being is distinct from income. Some people with high incomes suffer low financial well-being, as their incomes fall short of their aspirations. Such people feel propelled to reach their aspirations by taking risk and willing to bear losses. Conversely, some people with low incomes...
Persistent link: https://www.econbiz.de/10011083480
probability events), status quo bias, and reference- dependent S-shaped valuations. These biases arise to correct for the winner …
Persistent link: https://www.econbiz.de/10011083577
The paper reports the result of an experimental game on asset integration and risk taking. We find evidence that winnings in earlier rounds affect risk taking in subsequent rounds, but no evidence that real life wealth outside the experiment affects risk taking. We find some evidence of...
Persistent link: https://www.econbiz.de/10011084146
There is widespread evidence that monetary policy exerts asymmetric effects on output over contractions and expansions in economic activity, while price responses display no sizeable asymmetry. To rationalize these facts we develop a dynamic general equilibrium model where households’ utility...
Persistent link: https://www.econbiz.de/10011084378
This paper tests for reference dependence, using data from Impressionist and Contemporary Art auctions. We distinguish reference dependence based on ‘rule of thumb’ learning from reference dependence based on ‘rational’ learning. Furthermore, we distinguish pure reference dependence from...
Persistent link: https://www.econbiz.de/10005661640
Data from downtown Boston in the 1990s show that loss aversion determines seller behaviour in the housing market. Condominium owners subject to nominal losses: (1) set higher asking prices of 25-35% of the difference between the property’s expected selling price and their original purchase...
Persistent link: https://www.econbiz.de/10005136421
We examine a simple measure of portfolio performance based on prospect theory, which captures not only risk and return but also reflects differential aversion to upside and downside risk. The measure we propose is a ratio of gains to losses, with the gains and losses weighted (if desired) to...
Persistent link: https://www.econbiz.de/10005114253
In this Paper we introduce flexibility as an economic concept and apply it to the firm’s security-issuance decisions and capital structure choice. Flexibility is the ability to make decisions that one thinks are best even when others disagree. Firms value flexibility because it allows...
Persistent link: https://www.econbiz.de/10005666532
endogenous decision to collect information before taking an action creates a systematic and testable bias in the aggregate …
Persistent link: https://www.econbiz.de/10005792500
This article provides a review of recent literature in economics on the effect of mass media on politics. The focus is on the welfare effects of mass media. I also discuss the likely implications of existing behavioral theories of media effects, developed outside of economics.
Persistent link: https://www.econbiz.de/10011168894