This paper presents a model and an experiment, both suggesting that wishful thinking is a pervasive phenomenon that aect decisions large and small. Agents in the model start out with state-dependent payos, and behave as if high-payo states are more likely. Subsequent choices maximize...

I examine a class of utility maximization problems with a not necessarily lawinvariant utility, and with a not necessarily law-invariant risk measure constraint. The objective function is an integral of some function U with respect to some probability measure P, and the constraint set contains...

I examine a class of utility maximization problems with a not necessarily law-invariant utility, and with a not necessarily law-invariant risk measure constraint. The objective function is an integral of some function U with respect to some probability measure P, and the constraint set contains...