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Averting risk in the face of large losses: Bernoulli vs. Tversky and Kahneman

  • Bosch-Domènech, Antoni
  • Silvestre, Joaquim

Prospect Theory asserts that people display risk attraction in high-probability losses. But our subjects tend to avoid fair risks for large ([euro]30 to [euro]90), high-probability (80%) real losses, vindicating Bernoulli's view that risk aversion is the dominant attitude.

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File URL: http://www.sciencedirect.com/science/article/B6V84-4Y7P6R5-3/2/3bf92a21244a6898c2054495a3c1ae9f
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Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 107 (2010)
Issue (Month): 2 (May)
Pages: 180-182

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Handle: RePEc:eee:ecolet:v:107:y:2010:i:2:p:180-182
Contact details of provider: Web page: http://www.elsevier.com/locate/ecolet

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