Individual Preferences, Monetary Gambles, and Stock Market Participation: A Case for Narrow Framing

By Nicholas Barberis, Ming Huang, Richard H. Thaler. 2006

555 citations recorded by the source corpus.

Subfields: Economics and Econometrics, Finance, General Decision Sciences

View Paper: https://www.semanticscholar.org/paper/9935464bfb115bd7401a5411155a8043ab81aa98

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

In Finance

In General Decision Sciences

Citations in the corpus

An Endowment Effect for Risk: Experimental Tests of Stochastic Reference Points (2015, background): “…risk aversion for binary gambles only when the referent is relatively certain.59 First, in finance, first-order risk aversion is argued to influence stock market participation ðHaliassos and Bertaut 1995; Barberis, Huang, and Thaler 2006Þ and returns ðEpstein and Zin 1990; Barberis and Huang 2001Þ.”
Preferences for One-Shot Resolution of Uncertainty and Allais-Type Behavior (2008, unknown): “u(x; v) v = ( [u(x; 0) u(x (v) ; 0)] 1 v [1 u(x(v);0)] if x > x (v) [u(x (v) ; 1) u(x; 1)] v u(x(v);1) if x < x (v) (4)”
Psychology and Economics: Evidence from the Field (2009, unknown): “Barberis, Huang, and Thaler (2006) formalizes this argument showing that even nonexpected utility theories that display first-order risk aversion (including prospect theory) do not accommodate the observed risk-taking behavior in the laboratory, unless one assumes narrow framing.”
Regular prices and sales: Regular prices and sales (2010, unknown): “In addition, as argued by Rabin (2000a), Rabin and Thaler (2001), Barberis et al. (2006), and other researchers, the most significant source of aversion to risk over modest stakes is loss aversion.”
Financial Literacy, Portfolio Choice and Financial Well-Being (2016, background): “One explanation is that different households have different preferences about risk or uncertainty, some are extremely loss avert and resist to participate (Barberis et al. 2006).”
PEER EFFECTS IN ECONOMIC ATTITUDES (2014, unknown): “Though Barsky et al. (1997) find a positive relationship between financial risk aversion and risky behaviors, such as smoking, drinking, and failing to have insurance, they point out that “risk tolerance explains only a small fraction of the variation of the studied behaviors.”
A Structural Analysis of Disappointment Aversion in a Real Effort Competition (2012, unknown): “Barberis et al. (2006) provide evidence that attitudes towards small gambles can only be explained by first-order loss aversion together 11Instead, Gul (1991) uses probability weighting, while Loomes and Sugden (1986) insist on the differentiability of utility.”
Reference-Dependent Risk Attitudes (2007, methodology): “…on gainloss sensations when making decisions.23 For 22 For papers highlighting the role of bracketing in this and other domains, see Kahneman and Dan Lovallo (1993), Shlomo Benartzi and Thaler (1995), Daniel Read, Loewenstein, and Rabin (1999), Thaler (2000), and Barberis, Huang, and Thaler (2006).”
Stocks as Lotteries: the Implications of Probability Weighting for Security Prices (2008, unknown): “…explain with differentiable utility functions, whether expected utility or non-expected utility, because the very high local risk aversion required to do so typically predicts implausibly high aversion to large-scale gambles (Epstein and Zin, 1990; Rabin, 2000; Barberis, Huang, and Thaler, 2006).”