In a recent paper entitled ldquo;Putting Risk in its Proper Placerdquo;, Eeckhoudt and Schlesinger (2006) established a theorem linking the sign of the n-th derivative of an agent's utility function to her preferences among pairs of simple lotteries. We characterize these lotteries and show...

The disposition effect is a well established phenomenon in the empirical and experimental financial literature. It leads to sell winners too early and to hold losers too long. In this paper, we first show that this phenomenon has two non negligible consequences. It decreases the welfare of...

This paper highlights the role played by overconfidence and risk perception in the risk-taking behaviors of finance professionals. We interviewed 64 high-level professionals and demonstrate that they are overconfident in both the general and the financial domains. Using a recent measure proposed...

This paper studies the properties of bid and ask prices posted by a monopolistic market-maker, without parametric assumptions about the utility function of the market maker or about the probability distribution of the return of the risky asset. We first prove that the two prices can be higher or...

We analyse the existence of preferred numbers on the French Lotto market and prove that this market is not strongly efficient in the sense of Thaler & Ziemba (1988). The preference for low numbers is investigated by means of stochastic dominance tests. The specific features of the French Lotto...