The Decision Process of Individuals under Conditions of Risk: An Experimental Study

Samir K. Barua and Srinivasan G

IIMA Working Papers from Indian Institute of Management Ahmedabad, Research and Publication Department

Abstract: Theoretical models in finance are many a time based on unrealistic assumptions about the behaviour of individuals. Empirical validation of the models is expected to vindicate the assumptions. However, in most situations, the approaches used for empirical validations suffer from serious limitations, either because of the nature of data used or because of the testing procedures used. Hence, the doubts about the underlying assumptions on individual behaviour remain unresolved. In this paper, an attempt has been made to study some common beliefs about behaviour of individuals in risky situations, through a controlled experiment. The results indicate that some oft-believed behavioural traits are indeed true, and the theories based on assumptions which are counter to these beliefs, need to be reconsidered.

Date: 1987-01-01
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iim:iimawp:wp00735

Access Statistics for this paper

More papers in IIMA Working Papers from Indian Institute of Management Ahmedabad, Research and Publication Department Contact information at EDIRC.
Bibliographic data for series maintained by ().