We study the connections between stochastic dominance and law invariant preferences. Whenever the functional that represents preferences depends only on the law of the random variable, we shall look for conditions that imply a ranking of distributions. In analogy with the Expected Utility...

Starting from the theory of portfolio selection under Cumulative Prospect Theory (CPT) in a one period model, we firstly present some remarks connected with the violation of the so-called loss aversion in the case of power utility functions. The main contribution of this paper comes from the...

In this thesis we explore two recent topics in behavioral finance, namely portfolio optimization by non-expected utility insiders and existence of equilibria in financial markets populated by heterogeneous agents. Firstly, we review a number of theories which have been used to model behavioral...