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Myopic loss aversion revisited
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Blavatskyy, Pavlo and Pogrebna, Ganna. (2009) Myopic loss aversion revisited. Economics Letters, Vol.104 (No.1). pp. 43-45. ISSN 01651765
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Official URL: http://dx.doi.org/10.1016/j.econlet.2009.03.023
Abstract
In this paper we reexamine several experimental papers on myopic loss aversion by analyzing individual rather than aggregate choice patterns. We find that the behavior of the majority of subjects is inconsistent with the hypothesis of myopic loss aversion.
| Item Type: | Journal Article |
|---|---|
| Subjects: | H Social Sciences > HB Economic Theory |
| Divisions: | Faculty of Social Sciences > Economics |
| Library of Congress Subject Headings (LCSH): | Loss aversion, Risk |
| Journal or Publication Title: | Economics Letters |
| Publisher: | Elsevier |
| ISSN: | 01651765 |
| Date: | July 2009 |
| Volume: | Vol.104 |
| Number: | No.1 |
| Page Range: | pp. 43-45 |
| Identification Number: | 10.1016/j.econlet.2009.03.023 |
| Status: | Peer Reviewed |
| Access rights to Published version: | Restricted or Subscription Access |
| References: | Abdellaoui, M. (2000) “Parameter-free Elicitation of Utility and Probability Weighting Functions”, Management Science, XLVI, 1497-1512. Bellemare, Ch., Krause, M., Kröger, S. and Ch. Zhang (2005) “Myopic Loss Aversion: Information Feedback vs. Investment Flexibility”, Economics Letters, 87, 319-324. Benartzi, S. and R. Thaler (1995) “Myopic Loss Aversion and the Equity Premium Puzzle”, Quarterly Journal of Economics, CX, 73-95. Durand, R., Lloyd, P. and H. Wee Tee (2004) “Myopic Loss Aversion and the Equity Premium Puzzle Reconsidered”, Finance Research Letters, 1, 171-177. Fielding, D. and L. Stracca (2006) “Myopic Loss Aversion, Disappointment Aversion and the Equity Premium Puzzle”, Journal of Economic Behavior and Organization, 64(2), 250-268. Gneezy, U., Kapteyn A., and J. Potters (2003) “Evaluation Periods and Asset Prices in a Market Experiment”, Journal of Finance, LXIII, 821-838. Gneezy, U., and J. Potters (1997) “An Experiment on Risk Taking and Evaluation Periods”, Quarterly Journal of Economics, CXII, 631-645. Haigh, M. and J. List (2005) “Do Professional Traders Exhibit Myopic Loss Aversion? An Experimental Analysis”, The Journal of Finance, LX, 523-534. Köbberling, V. and P. Wakker (2005) “An Index of Loss Aversion“, Journal of Economic Theory, CXXII, 119-131. Langer, Th. and M. Weber (2005) “Myopic Prospect Theory vs. Myopic Loss Aversion: How General is the Phenomenon?” Journal of Economic Behavior and Organization, LVI, 25-38. Mehra, R. and E. Prescott (1984) “The Equity Premium: a Puzzle”, Journal of Monetary Economics, XV, 341-350. Plott, Ch. and K. Zeiler (2005) “The Willingness to Pay—Willingness to Accept Gap, the “Endowment Effect, Subject Misconceptions, and Experimental Procedures for Eliciting Valuations,” American Economic Review, 95(3), 530-545. Plott, Ch. and K. Zeiler (2007) “Asymmetries in Exchange Behavior Incorrectly Interpreted as Evidence of Prospect Theory," American Economic Review, 97(4), 1449-1466. Thaler, R., Tversky, A., Kahneman, D., and A. Schwartz (1997) “The Effect of Myopia and Loss Aversion on Risk Taking: An Experimental Test,” Quarterly Journal of Economics, CXII, 647-661 Tversky, A. and D. Kahneman (1992) “Advances in Prospect Theory: Cumulative Representation of Uncertainty,” Journal of Risk and Uncertainty, V, 297-323. |
| URI: | http://wrap.warwick.ac.uk/id/eprint/37689 |
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