We propose a simple model of decision making under risk inspired by the "half-full, half-empty" glass metaphor. The model is intuitive in that it is closely related to the expected value criterion and its parameters have a clear behavioral interpretation, and parsimonious in that it provides an...

This paper develops a theoretical model to study how investment decisions in innovation taken by a single agent are influences by environmental externalities produced by investment decisions taken by other agents. The model acts in a dynamic framework, where knowledge stock represents the...

This paper develops a behavioural asset pricing model in which traders are not fully rational as is commonly assumed in the literature. The model derived is underpinned by the notion that agents' preferences are affected by their degree of optimism or pessimism regarding future market states. It...

In this paper we introduce a new, analytically tractable model for decision-making under risk in which psychological characteristics related to the degree of optimism or pessimism of the decision-maker are considered. The model we propose, which is based on a two-parameter optimism weighting...