This paper studies the problem of decision-making under risk by agents whose information
processing abilities may be limited. The constructed theoretical framework grounds on …

This work studies the problem of decision-making under risk by agents whose information
processing abilities may be limited. The constructed theoretical framework grounds on …

This paper discusses the idea of reconciling efficient market hypothesis and behavioral
finance using the literature of decision theories and information sciences. The focus is …

Real-world financial dynamics daily do challenge the credibility of the Efficient Market
Hypothesis, the pillar of the whole martingale-based modern financial theory stating that at …

Heterogeneity of risk aversion parameters of economic agents facilitates risk sharing, as
such, is a necessary condition for economic viability of stock markets. This study finds price …

Behavioral finance is the application of psychology to finance, dedicated to explaining
anomalies in the financial market based on research and analysis of human behavior. This …

We present a model of an artificial financial economy, where a number of heterogenous
agents, ie, households, firms, and a commercial bank make endogenous financial decisions …

Abstract In Bernheim and Sprenger (2020) and Bernheim, Royer, and Sprenger (2022), we
devised and implemented a new test of rank-dependent probability weighting for Cumulative …

We observe that the standard variant of Prospect Theory cannot describe very risk-averse
choices in simple lotteries. This makes it difficult to accommodate it with experimental data …

Cumulative Prospect Theory (CPT), the leading behavioral account of decisionmaking under
uncertainty, avoids the dominance violations implicit in Prospect Theory (PT) by assuming …