Please use this identifier to cite or link to this item:
Full metadata record
DC FieldValueLanguage
dc.contributor.authorVinokur, Leonen_US
dc.description.abstractThe Prospect Theory proposes to assess outcomes relative to a reference point (or benchmark). Although the literature recognises the relevance of dynamic benchmarks, most of the applications of Prospect Theory employ static reference points (or a status quo). This paper aims to develop a Prospect Theory framework for investment under uncertainty subject to a dynamic reference point, within the context of environmental policy making, where the distinction between a dynamic and a static frameworks is crucial. I evince that, in contrast to the static framework, in a dynamic framework the investor measures not only the absolute but also the relative risk premium (Sharpe ratio) of the investment opportunity, incorporating the risks and returns of a reference portfolio. I propose that there exists a relation between static and dynamic frameworks. Using the dynamic framework, I argue that in the environmental context international co-operation is the key to a successful environmental policy.en_US
dc.publisher|aQueen Mary, Univ. of London, School of Economics and Finance |cLondonen_US
dc.relation.ispartofseries|aWorking Paper // School of Economics and Finance, Queen Mary, University of London |x651en_US
dc.subject.keywordprospect theoryen_US
dc.subject.keyworddynamic referenceen_US
dc.subject.keywordsustainable developmenten_US
dc.subject.stwProspect Theoryen_US
dc.subject.stwNachhaltige Entwicklungen_US
dc.subject.stwInternationale Umweltpolitiken_US
dc.subject.stwDynamisches Modellen_US
dc.titleEvaluation with dynamic reference: Sustainable investmenten_US
dc.typeWorking Paperen_US

Files in This Item:
227.12 kB

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.