Thirty Years of Prospect Theory in Economics: A Review and Assessment

By Nicholas Barberis. 2012

1,367 citations recorded by the source corpus.

Subfields: Economics and Econometrics, Finance, General Decision Sciences

View Paper: https://www.semanticscholar.org/paper/6284eb72dab755f90364d93416e69471595a6271

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Citations in the corpus

Optimal retirement income tontines (2015, neutral): “17Source: Barberis (2013).”
Are consumers willing to switch to smart time of use electricity tariffs? The importance of loss-aversion and electric vehicle ownership (2017, background): “However, to work, sTOU tariffs require two types of consumer articipation: (1) consumers to switch to a sTOU tariff (switching) nd; (2) respond to the price signals by changing their consumption atterns (load shifting).”
Behavioral Economics of Education (2015, background): “As a consequence, many models in this field still are evolving (e.g., see the discussion of how models of reference dependent preferences progressed in Barberis, 2013).”
Divergence between individual perceptions and objective indicators of tail risks: Evidence from floodplain residents in New York City (2015, background): “…individual decisions are consistent with the probability-weighting function of prospect theory, with mixed results (for instance, see Tversky and Kahneman 1992; Bordalo, Gennaioli, and Shleifer 2012; Fehr-Duda and Epper 2012; Barberis 2013b; Barseghyan et al. 2013a,b; Carman and Kooreman 2014).”
Do investors exhibit behavioral biases in investment decision making? A systematic review (2018, background): “According to Barberis (2013a, 2013b), financial innovations are one of the measures to reduce the effects of psychological factors of the irrational behavior of investors.”
An Overview of Macroprudential Policy Tools (2014, neutral): “Other sources appear more behavioral, as when investors chase similar investment opportunities (Shleifer 2000, and Barberis, 2013, review) or ‘neglect’ the possibility of rare but large shocks (Gennaioli et al., 2013).”
Optimal insurance under rank‐dependent utility and incentive compatibility (2015, neutral): “(4) As R(x) ≡ x − I(x), it is easily seen that the joint constraint of (3) and (4) is equivalent to the following one I(0) = 0, 0 6 I(x)− I(y) 6 x− y, ∀ 0 6 y 6 x 6 M.”
A Closer Look at Socioemotional Wealth: Its Flows, Stocks, and Prospects for Moving Forward (2015, background): “Another major difficulty with applying prospect theory logic to SEW considerations is that the theory does not specify where the reference point should be set; so scholars have typically assumed that it should be the status quo or do-nothing scenarios (Barberis, 2013).”
Household Portfolio Underdiversification and Probability Weighting: Evidence from the Field (2018, positive): “…is due to preferences rather than probabilistic unsophistication has implications for whether probability weighting is a preference or a “mistake,” in the sense that people would choose differently if they understood decision theory (Fehr-Duda and Epper, 2012; Barberis, 2013a,b).”
Generating Employment in Poor and Fragile States: Evidence from Labor Market and Entrepreneurship Programs (2015, background): “93Barberis (2013) 94The most famous example is Gurr (1971). 95It was rooted in the psychological frustration-aggression hypothesis, dating from Dollard et al.”
Salience and Asset Prices (2013, background): “An example of a salience function satisfying these properties is σ(x, y) = |x− y|/(x+ y), where x, y > 0.”
Measuring Loss Aversion under Ambiguity: A Method to Make Prospect Theory Completely Observable (2016, background): “There is abundant qualitative evidence for loss aversion, from both the lab and the field (Barberis 2013; Fox and Poldrack 2014; Wakker 2010).”