Myagkov, Mikhail; Plott, Charles R - In: American Economic Review 87 (1997) 5, pp. 801-28
Exchange economies were created in which individuals faced losses. If people are risk seeking in the losses, as predicted by prospect theory, then due to the nonconvexity, the competitive equilibria are all on the boundaries of the Edgeworth box. The experimental results are that risk-seeking...