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Local Thinking and Skewness Preferences

Markus Dertwinkel-Kalt () and Mats Köster

Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking from Verein für Socialpolitik / German Economic Association

Abstract: We show that models of stimulus-driven attention can account for skewness preferences. As unlikely, but outstanding payoffs attract attention, an agent exhibits a preference for right-skewed and an aversion toward left-skewed risks. We show that extreme predictions on skewness preferences by prospect theory can be ruled out for models of stimulus-driven attention.

JEL-codes: D81 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-mic, nep-neu and nep-upt
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Citations: View citations in EconPapers (3) Track citations by RSS feed

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Working Paper: Local Thinking and Skewness Preferences (2017) Downloads
Working Paper: Local thinking and skewness preferences (2017) Downloads
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