The as-is journal review process: Let authors own their ideas

Benno Torgler,, Sascha L. Schmidt and Bruno Frey

No 282, IEW - Working Papers from Institute for Empirical Research in Economics - University of Zurich

Abstract: In this paper we present a two period model, where the agent's preferences are described by prospect theory as proposed by Kahneman and Tversky. We solve for the agent's portfolio decision. Our findings are that the changes in portfolio weights depend crucially on the reference point and the ratio between the reference point and the current wealth, and thus only indirectly on the performance of the risky asset. Our model explains why investor keep on holding, or even buy, loosing investments.

Keywords: Disposition effect; house money effect; prospect theory; port-folio choice (search for similar items in EconPapers)
JEL-codes: D00 D60 D82 D92 L83 (search for similar items in EconPapers)
Date: 2006-04
New Economics Papers: this item is included in nep-upt
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Citations: View citations in EconPapers (1)

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Working Paper: The as-is journal review process: Let authors own their ideas (2006)
Working Paper: The as-is journal review process: Let authors own their ideas (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:zur:iewwpx:282

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