Knowledge Tree
Prospect Theory
Facts (17)
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The Influence of Behavioral Biases on Investment Decisions jmsr-online.com Jul 8, 2025 8 facts
claimThe paper 'The Influence of Behavioral Biases on Investment Decisions' proposes an integrated framework that links cognitive biases, knowledge-sharing behavior, and investment decisions, grounded in Prospect Theory and Dual-Process Theory.
claimProspect Theory explains why investors may irrationally avoid selling depreciated assets or engage in risk-seeking behavior after experiencing losses.
referenceThe conceptual paper 'The Influence of Behavioral Biases on Investment Decisions' utilizes Prospect Theory and Dual-Process Theory to construct a framework explaining how intuitive and analytical thinking shape investment behavior.
referenceThe study "The Influence of Behavioral Biases on Investment Decisions" utilizes Prospect Theory and Dual-Process Theory to conceptually explain retail investor behavior.
referenceProspect Theory (Kahneman & Tversky, 1979) and Dual-Process Theory (Stanovich & West, 2000) provide theoretical frameworks for understanding how intuitive (System 1) and analytical (System 2) thinking interact in financial contexts.
claimLoss aversion, a concept consistent with prospect theory, causes investors to experience losses more intensely than gains, which leads to the irrational holding of underperforming stocks.
claimThe framework proposed in 'The Influence of Behavioral Biases on Investment Decisions' is grounded in dual-process theory and prospect theory, and is enriched by cross-disciplinary insights from organizational psychology.
referenceProspect Theory, introduced by Daniel Kahneman and Amos Tversky in 1979, posits that individuals evaluate outcomes relative to a reference point and are loss-averse, valuing losses more than equivalent gains.
The Impact of Cognitive Biases on Professionals' Decision-Making frontiersin.org 4 facts
referenceKahneman and Tversky (1979) introduced Prospect Theory, which provides an analysis of decision-making under risk as an alternative to expected utility theory.
claimThe disposition effect originates from loss aversion, a concept described in prospect theory by Kahneman and Tversky (1979).
claimMyopic loss aversion, a key concept of prospect theory, can account for the equity premium puzzle, which is the excessively high difference between equity returns and the return of Treasury bills.
claimBehavioral finance utilizes prospect theory, developed by Kahneman and Tversky in 1979, as a more realistic view of decision-making under uncertainty than expected utility theory.
Psychology Of Financial Decision-Making - Meegle meegle.com 2 facts
claimThe field of behavioral finance gained momentum in the late 20th century with the work of psychologists Daniel Kahneman and Amos Tversky, who introduced Prospect Theory.
claimPsychologists Daniel Kahneman and Amos Tversky introduced Prospect Theory in the late 20th century, which helped the field of behavioral finance gain momentum.
Analysing the behavioural, psychological, and demographic ... - OUCI ouci.dntb.gov.ua 1 fact
referenceKahneman authored the paper 'Prospect theory: an analysis of decision under risk,' published in Econometrica, issue 47, page 263.
Tariffs and Democratic Decline: Economic Burdens and Executive ... sciencepublishinggroup.com 1 fact
referenceKahneman, D. and Tversky, A. published 'Prospect Theory: An Analysis of Decisions Under Risk' in Econometrica in 1979.
Behavioral Economics: Everyday Biases That Shape Money Choices verifiedinvesting.com 1 fact
claimProspect Theory, developed by Daniel Kahneman and Amos Tversky, asserts that people experience loss aversion, where the pain of losing money outweighs the pleasure of winning an equivalent amount.