Bitte verwenden Sie diesen Link, um diese Publikation zu zitieren, oder auf sie als Internetquelle zu verweisen: https://hdl.handle.net/10419/55564 
Kompletter Metadatensatz
DublinCore-FeldWertSprache
dc.contributor.authorBracha, Anaten
dc.contributor.authorBrown, Donald J.en
dc.date.accessioned2011-01-10-
dc.date.accessioned2012-02-23T07:59:59Z-
dc.date.available2012-02-23T07:59:59Z-
dc.date.issued2010-
dc.identifier.urihttp://hdl.handle.net/10419/55564-
dc.description.abstractOptimism bias is inconsistent with the independence of decision weights and payoffs found in models of choice under risk, such as expected utility theory and prospect theory. Hence, to explain the evidence suggesting that agents are optimistically biased, we propose an alternative model of risky choice, affective decision making, where decision weights - which we label affective or perceived risk - are endogenized. Affective decision making (ADM) is a strategic model of choice under risk where we posit two cognitive processes - the rational and the emotional process. The two processes interact in a simultaneous-move intrapersonal potential game, and observed choice is the result of a pure Nash equilibrium strategy in this game. We show that regular ADM potential games have an odd number of locally unique pure strategy Nash equilibria, and demonstrate this finding for ADM in insurance markets. We prove that ADM potential games are refutable by axiomatizing the ADM potential maximizers.en
dc.language.isoengen
dc.publisher|aFederal Reserve Bank of Boston |cBoston, MAen
dc.relation.ispartofseries|aWorking Papers |x10-16en
dc.subject.jelD01en
dc.subject.jelD81en
dc.subject.jelG22en
dc.subject.ddc330en
dc.subject.stwEntscheidungstheorieen
dc.subject.stwEntscheidung bei Risikoen
dc.subject.stwErwartungsnutzenen
dc.subject.stwTheorieen
dc.titleAffective decision making: A theory of optimism bias-
dc.typeWorking Paperen
dc.identifier.ppn642984131en
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen

Datei(en):
Datei
Größe
408.39 kB





Publikationen in EconStor sind urheberrechtlich geschützt.