experimental data from a newspaper experiment. …

and risk aversion. Kahneman & Tversky suggest Prospect Theory (PT) and Cumulative Prospect Theory (CPT) as an alternative … aversion and maximize the expectation of an S-shaped value function which contains a risk-seeking segment. Employing change of … assumptions of normality and homogeneous expectations, and the S-shaped value function violates the risk aversion assumption. We …

. A standard explanation of the disposition effect refers to prospect theory and in particular to the asymmetric risk … aversion according to which investors are risk averse when faced with gains and risk-seeking when faced with losses. We show … that the investment has taken place, but not ex-ante, requiring that the investment is made in the first place. …

We argue that the equity premium puzzle stems from a mismatch of applying mental accounting to experiments on risk … consistently in both areas the degrees of risk aversions obtained coincide and the equity premium puzzle is gone. …

investment opportunities are not spanned by those of existing assets. The present paper examines the impact of managerial risk … aversion on investment decisions when the manager is exposed to idiosyncratic risk and faces the risk of a control challenge …. In the paper, the investment policy selected by the manager reflects a trade-off between his incentives to reduce risk …

In the standard real options approach to investment under uncertainty, agents formulate optimal policies under the … assumptions of risk neutrality or perfect capital markets. Although the assumptions of risk neutrality or market completeness are … face incomplete markets. In this paper we extend the real options approach to incorporate risk aversion for a general class …

state of the economy. We find that Knightian pessimism generates substan-tial First Order Risk Aversion (FORA) sects that … findings show that realistic amounts of both pessimism and standard risk aversion yield substantial equity premia and low …

investment flexibilitychange. However, there is no (within-subject) experimental evidence for this conjectureso far. To close … this gap we conduct the first experiment on MLA in which thedegree of myopia is manipulated to change over time. Our … analysis reveals that the influenceof changes in feedback frequency and investment flexibility are not asstraightforward as …