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Reasons for the annuity puzzle

Edmund Cannon and Ian Tonks

in Annuity Markets

Published in print:
2008
Published Online:
January 2009
ISBN:
9780199216994
eISBN:
9780191711978
Item type:
chapter
Publisher:
Oxford University Press
DOI:
10.1093/acprof:oso/9780199216994.003.0008
Subject:
Business and Management, Pensions and Pension Management

This chapter discusses a variety of reasons why it may be rational to avoid full annuitization. It discusses the interaction of annuities with state pensions, deferring annuitization, expenditure ... More


Microeconomics: Optimization, Experiments, and Behavior

John P. Burkett

Published in print:
2006
Published Online:
October 2011
ISBN:
9780195189629
eISBN:
9780199850778
Item type:
book
Publisher:
Oxford University Press
DOI:
10.1093/acprof:oso/9780195189629.001.0001
Subject:
Economics and Finance, Microeconomics

This book presents microeconomics as an evolving science, interacting with mathematics, psychology, and other disciplines and offering solutions to a growing range of practical problems. It gives ... More


Managing Traders

Mark Fenton-O'Creevy, Nigel Nicholson, Emma Soane, and Paul Willman

in Traders: Risks, Decisions, and Management in Financial Markets

Published in print:
2004
Published Online:
October 2011
ISBN:
9780199269488
eISBN:
9780191699405
Item type:
chapter
Publisher:
Oxford University Press
DOI:
10.1093/acprof:oso/9780199269488.003.0008
Subject:
Business and Management, Finance, Accounting, and Banking, Organization Studies

In analysing the behaviour of traders in financial markets, one would observe that the reliance of traders on high bonus payments slows down the accumulation of profits in the investment-banking ... More


Loss Aversion

Spiegler Ran

in Bounded Rationality and Industrial Organization

Published in print:
2011
Published Online:
September 2011
ISBN:
9780195398717
eISBN:
9780199896790
Item type:
chapter
Publisher:
Oxford University Press
DOI:
10.1093/acprof:oso/9780195398717.003.0009
Subject:
Economics and Finance, Behavioural Economics

This chapter analyzes monopoly and duopoly pricing when consumers display loss aversion. It assumes that consumers’ reference point is determined by their expectations. First, the model is applied to ... More


Rule Preference

Ekkehart Schlicht

in On Custom in the Economy

Published in print:
1998
Published Online:
November 2003
ISBN:
9780198292241
eISBN:
9780191596865
Item type:
chapter
Publisher:
Oxford University Press
DOI:
10.1093/0198292244.003.0009
Subject:
Economics and Finance, Microeconomics, History of Economic Thought

Rules are cognitive entities that carry behavioural consequences. Phenomena of commitment, obedience, status quo preference, and reciprocity are brought about by rule preference, viz. the desire of ... More


Human Nature and Common-Sense Morality

Ingmar Persson and Julian Savulescu

in Unfit for the Future: The Need for Moral Enhancement

Published in print:
2012
Published Online:
September 2012
ISBN:
9780199653645
eISBN:
9780191742033
Item type:
chapter
Publisher:
Oxford University Press
DOI:
10.1093/acprof:oso/9780199653645.003.0002
Subject:
Philosophy, Moral Philosophy, Political Philosophy

This chapter reviews relevant aspects of human psychology and common-sense morality. The fact that it is easier for us to harm than to benefit is reflected in so-called loss aversion; that our ... More


Loss Aversion and Reference-dependent Preferences

John P. Burkett

in Microeconomics: Optimization, Experiments, and Behavior

Published in print:
2006
Published Online:
October 2011
ISBN:
9780195189629
eISBN:
9780199850778
Item type:
chapter
Publisher:
Oxford University Press
DOI:
10.1093/acprof:oso/9780195189629.003.0011
Subject:
Economics and Finance, Microeconomics

This chapter discusses microeconomics theories of reference-dependent consumer preferences and loss aversion. It provides evidence that under some circumstances preferences depend on a reference and ... More


“Get‐Evenitis”: Riding Losers Too Long

Hersh Shefrin

in Beyond Greed and Fear: Understanding Behavioral Finance and the Psychology of Investing

Published in print:
2002
Published Online:
November 2003
ISBN:
9780195161212
eISBN:
9780199832996
Item type:
chapter
Publisher:
Oxford University Press
DOI:
10.1093/0195161211.003.0009
Subject:
Economics and Finance, Financial Economics

Most people exhibit aversion to sure losses: they have great difficulty coming to terms with losses. Consequently, they are predisposed to holding their losers too long, and correspondingly sell ... More


Frame Dependence: The Second Theme

Hersh Shefrin

in Beyond Greed and Fear: Understanding Behavioral Finance and the Psychology of Investing

Published in print:
2002
Published Online:
November 2003
ISBN:
9780195161212
eISBN:
9780199832996
Item type:
chapter
Publisher:
Oxford University Press
DOI:
10.1093/0195161211.003.0003
Subject:
Economics and Finance, Financial Economics

A frame is a description. Frame dependence means that people make decisions that are influenced by the manner in which the information is presented. Frame dependence manifests itself in the way that ... More


Retirement Saving: Myopia and Self‐Control

Hersh Shefrin

in Beyond Greed and Fear: Understanding Behavioral Finance and the Psychology of Investing

Published in print:
2002
Published Online:
November 2003
ISBN:
9780195161212
eISBN:
9780199832996
Item type:
chapter
Publisher:
Oxford University Press
DOI:
10.1093/0195161211.003.0011
Subject:
Economics and Finance, Financial Economics

A great many people find that they lack the foresight and self‐control necessary to save adequately for retirement. But the spectrum is wide. Some people learn the keys to successful retirement ... More


Preferences

Andrew Ang

in Asset Management: A Systematic Approach to Factor Investing

Published in print:
2014
Published Online:
August 2014
ISBN:
9780199959327
eISBN:
9780199382323
Item type:
chapter
Publisher:
Oxford University Press
DOI:
10.1093/acprof:oso/9780199959327.003.0002
Subject:
Economics and Finance, Financial Economics

Investors generally dislike the risk of losses during bad times. Optimal portfolio choice trades off these risks with the potential of returns. While mean-variance utility treats gains and losses ... More


Rational Attitudes toward Risks

Paul Weirich

in Rational Responses to Risks

Published in print:
2020
Published Online:
August 2020
ISBN:
9780190089412
eISBN:
9780190089443
Item type:
chapter
Publisher:
Oxford University Press
DOI:
10.1093/oso/9780190089412.003.0004
Subject:
Philosophy, Logic/Philosophy of Mathematics

Rationality requires aversions to risks, considering them in isolation, but permits attractions to risks, taken as means to attainment of goals. It specifies the strength of an intrinsic aversion to ... More


Law, Psychology, and Morality: The Role of Loss Aversion

Eyal Zamir

Published in print:
2014
Published Online:
November 2014
ISBN:
9780199972050
eISBN:
9780190215064
Item type:
book
Publisher:
Oxford University Press
DOI:
10.1093/acprof:oso/9780199972050.001.0001
Subject:
Law, Philosophy of Law

Prospect theory posits that people do not perceive outcomes as final states of wealth or welfare, but rather as gains or losses in relation to some reference point. People are generally loss averse: ... More


Behavioral Studies

Eyal Zamir and Doron Teichman

in Behavioral Law and Economics

Published in print:
2018
Published Online:
June 2018
ISBN:
9780190901349
eISBN:
9780190901387
Item type:
chapter
Publisher:
Oxford University Press
DOI:
10.1093/oso/9780190901349.003.0003
Subject:
Law, Philosophy of Law

Against the background of rational choice theory, this chapter provides an overview of the behavioral sub-disciplines informing behavioral law and economics—including judgment and decision-making ... More


Corporate Takeovers and the Winner's Curse

Hersh Shefrin

in Beyond Greed and Fear: Understanding Behavioral Finance and the Psychology of Investing

Published in print:
2002
Published Online:
November 2003
ISBN:
9780195161212
eISBN:
9780199832996
Item type:
chapter
Publisher:
Oxford University Press
DOI:
10.1093/0195161211.003.0016
Subject:
Economics and Finance, Financial Economics

There is general evidence that corporate executives exhibit hubris, that they are impressed with their own abilities. Since July 1996, the Financial Executives Institute and Duke University have been ... More


Psychology

Robert G. Hagstrom

in Investing: The Last Liberal Art, Second Edition

Published in print:
2013
Published Online:
November 2015
ISBN:
9780231160100
eISBN:
9780231531016
Item type:
chapter
Publisher:
Columbia University Press
DOI:
10.7312/columbia/9780231160100.003.0005
Subject:
Economics and Finance, Financial Economics

This chapter examines the relevance of psychology to the world of investing. Psychologists are concerned with understanding all workings of the brain—the part that controls cognition (the process of ... More


Behavioral Aspects of Commodity Markets

John R. Nofsinger

in Commodities: Markets, Performance, and Strategies

Published in print:
2018
Published Online:
March 2018
ISBN:
9780190656010
eISBN:
9780190656041
Item type:
chapter
Publisher:
Oxford University Press
DOI:
10.1093/oso/9780190656010.003.0004
Subject:
Economics and Finance, Financial Economics

Are behavioral biases prevalent in commodities and futures markets? Although retail equity investors display many psychological biases, investors who are more sophisticated exhibit fewer biases. The ... More


Behavioral Insights and Basic Features of the Law

Eyal Zamir and Doron Teichman

in Behavioral Law and Economics

Published in print:
2018
Published Online:
June 2018
ISBN:
9780190901349
eISBN:
9780190901387
Item type:
chapter
Publisher:
Oxford University Press
DOI:
10.1093/oso/9780190901349.003.0006
Subject:
Law, Philosophy of Law

This chapter argues that reference-dependence and loss aversion are crucial not only to understanding human behavior, but also to understanding how the law shapes people’s behavior. Moreover, it ... More


Barriers to Dispute Resolution: Reflections on Peacemaking and Relationships between Adversaries

Byron Bland, Brenna Powell, and Lee Ross

in Understanding Social Action, Promoting Human Rights

Published in print:
2012
Published Online:
January 2013
ISBN:
9780195371895
eISBN:
9780199979127
Item type:
chapter
Publisher:
Oxford University Press
DOI:
10.1093/acprof:oso/9780195371895.003.0010
Subject:
Political Science, Democratization

In Chapter 10, social psychologist Lee Ross, ethicist Byron Bland, and political scientist Brenna Powell offer an interdisciplinary analysis of persistent psychological barriers to conflict ... More


The Debiasing Role of the Cross-Border Insolvency System

Irit Mevorach

in The Future of Cross-Border Insolvency: Overcoming Biases and Closing Gaps

Published in print:
2018
Published Online:
April 2018
ISBN:
9780198782896
eISBN:
9780191826115
Item type:
chapter
Publisher:
Oxford University Press
DOI:
10.1093/oso/9780198782896.003.0002
Subject:
Law, Company and Commercial Law, Private International Law

This chapter explores what the reasons for deviating from modified universalism in practice may be. To do so, it draws on behavioural international law and economics. The chapter argues that certain ... More


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