The Psychology of Tail Events: Progress and Challenges

Nicholas Barberis

American Economic Review, 2013, vol. 103, issue 3, 611-16

Abstract: Over the past decade there has been a surge of interest in "tail events," or rare, high-impact events. In this article, I start by summarizing some recent progress in our understanding of the psychology of tail events. I suggest that much of this progress has centered on the concept of "probability weighting" and, in particular, on applications of this concept in various fields of economics. I then describe some major open questions in this area.

JEL-codes: D81 D83 G22 (search for similar items in EconPapers)
Date: 2013
Note: DOI: 10.1257/aer.103.3.611
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Citations: View citations in EconPapers (74)

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