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Rational escalation of costs by playing a sequence of unfavorable gambles: the martingale

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  • Aloysius, John A.

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  • Aloysius, John A., 2003. "Rational escalation of costs by playing a sequence of unfavorable gambles: the martingale," Journal of Economic Behavior & Organization, Elsevier, vol. 51(1), pages 111-129, May.
    • Handle: RePEc:eee:jeborg:v:51:y:2003:i:1:p:111-129
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    1. Camerer, Colin F. & Weber, Roberto A., 1999. "The econometrics and behavioral economics of escalation of commitment: a re-examination of Staw and Hoang's NBA data," Journal of Economic Behavior & Organization, Elsevier, vol. 39(1), pages 59-82, May.
    2. Samuelson, Paul A, 1977. "St. Petersburg Paradoxes: Defanged, Dissected, and Historically Described," Journal of Economic Literature, American Economic Association, vol. 15(1), pages 24-55, March.
    3. Terrance Odean, 1998. "Are Investors Reluctant to Realize Their Losses?," Journal of Finance, American Finance Association, vol. 53(5), pages 1775-1798, October.
    4. Leininger, Wolfgang, 1991. "Patent competition, rent dissipation, and the persistence of monopoly: The role of research budgets," Journal of Economic Theory, Elsevier, vol. 53(1), pages 146-172, February.
    5. Kuhberger, Anton, 1998. "The Influence of Framing on Risky Decisions: A Meta-analysis," Organizational Behavior and Human Decision Processes, Elsevier, vol. 75(1), pages 23-55, July.
    6. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    7. Matthew Rabin, 2000. "Risk Aversion and Expected-Utility Theory: A Calibration Theorem," Econometrica, Econometric Society, vol. 68(5), pages 1281-1292, September.
    8. Nielsen, Lars Tyge, 1985. " Attractive Compounds of Unattractive Investments and Gambles," Scandinavian Journal of Economics, Wiley Blackwell, vol. 87(3), pages 463-473.
    9. Thaler, Richard, 1980. "Toward a positive theory of consumer choice," Journal of Economic Behavior & Organization, Elsevier, vol. 1(1), pages 39-60, March.
    10. Christian Gollier, 1996. "Repeated Optional Gambles and Risk Aversion," Management Science, INFORMS, vol. 42(11), pages 1524-1530, November.
    11. Richard H. Thaler & Eric J. Johnson, 1990. "Gambling with the House Money and Trying to Break Even: The Effects of Prior Outcomes on Risky Choice," Management Science, INFORMS, vol. 36(6), pages 643-660, June.
    12. Weber, Martin & Camerer, Colin F., 1998. "The disposition effect in securities trading: an experimental analysis," Journal of Economic Behavior & Organization, Elsevier, vol. 33(2), pages 167-184, January.
    13. Ross, Stephen A., 1999. "Adding Risks: Samuelson's Fallacy of Large Numbers Revisited," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 34(3), pages 323-339, September.
    14. Sickar, Michael J. & Highhouse, Scott, 1998. "Looking Closer at the Effects of Framing on Risky Choice: An Item Response Theory Analysis," Organizational Behavior and Human Decision Processes, Elsevier, vol. 75(1), pages 75-91, July.
    15. Terence M. Ryan, 1974. "The Use of Unbounded Utility Functions in Expected-Utility Maximization: Comment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 88(1), pages 133-135.
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    Cited by:

    1. Maximilian Rüdisser & Raphael Flepp & Egon Franck, 2017. "Do casinos pay their customers to become risk-averse? Revising the house money effect in a field experiment," Experimental Economics, Springer;Economic Science Association, vol. 20(3), pages 736-754, September.
    2. Yukalov, V.I., 2021. "A resolution of St. Petersburg paradox," Journal of Mathematical Economics, Elsevier, vol. 97(C).
    3. V. I. Yukalov, 2021. "A Resolution of St. Petersburg Paradox," Papers 2111.14635, arXiv.org.

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