The Disposition Effect

The Disposition Effect

The Disposition Effect  Download PDF  In an efficient market, of course, the disposition effect should not be present; the price paid for the asset is a sunk cost by the time of sale. However, the field of behavioral finance has proven many times that it was false: we...
The Prospect Theory

The Prospect Theory

The Prospect Theory Open PDF =>    The prospect theory was developed by Daniel Kahneman and Amos Tversky between 1979 and 1992. They showed how human decisions depart from those predicted by standard economic theory in decision-making under uncertainty. The...
The Concept of Time Inconsistency

The Concept of Time Inconsistency

The Concept of Time Inconsistency Download PDF  In economics, time-inconsistency is the problem that arises when a decision maker, especially a policymaker, prefers one policy in advance but later enacts a different one. Deciding among alternative policies at...