Prospect Theory: A Study of the Endowment Effect
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| Format: | Artículo científico |
| Language: | en |
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Universidade Federal de Santa Catarina
2007
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| _version_ | 1876482948079812608 |
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| author | Jurandir Sell Macedo |
| author_facet | Jurandir Sell Macedo |
| contents | Prospect Theory: A Study of the Endowment Effect Jurandir Sell Macedo Emílio Araújo Menezes Patrícia Nunes Rosilene Marcon Administración y Contabilidad Risk Prospect Theory Endowment Effect Behavioral Finance is a recent field of study which contradicts the presupposition supported by ModernFinance that decision makers act rationally. Prospect Theory, developed by Kahneman and Tversky (1979),is presented as an alternative model to the Theory of Expected Utility in relation to the way people decidein face of possibilities of risk. According to Prospect Theory, people define gains and losses based on a givenpoint of reference, which can be established on grounds of a given level of expected gain. This fact leads to theEndowment Effect - a behavioral trend investigated in this study whereby investors are influenced by aportfolio which they have received as an inheritance or endowment. The reason this occurs is that individualsusually define their expectations of gain according to the future profitability of the portfolio received, and notaccording to the future profitability of the market. Using an investment simulation, the Endowment Effectwas tested among 226 university students taking courses in the subject of capital markets. The resultsdemonstrate that the students were influenced by the different initial portfolios, which were randomlyassigned. 2007 artículo científico 1807-1821 https://www.redalyc.org/articulo.oa?id=76240802 https://www.redalyc.org/journal/762/76240802/ https://www.redalyc.org/journal/762/76240802/html/ https://www.redalyc.org/journal/762/76240802/76240802.epub https://www.redalyc.org/journal/762/76240802/movil en http://www.redalyc.org/revista.oa?id=762 Revista Contemporânea de Contabilidade application/pdf Universidade Federal de Santa Catarina Revista Contemporânea de Contabilidade (Brasil) Num.8 Vol.4 |
| format | Artículo científico |
| id | redalyc_76240802 |
| institution | Redalyc |
| language | en |
| publishDate | 2007 |
| publisher | Universidade Federal de Santa Catarina |
| spellingShingle | Prospect Theory: A Study of the Endowment Effect Jurandir Sell Macedo Administración y Contabilidad Risk Prospect Theory Endowment Effect Prospect Theory: A Study of the Endowment Effect Jurandir Sell Macedo Emílio Araújo Menezes Patrícia Nunes Rosilene Marcon Administración y Contabilidad Risk Prospect Theory Endowment Effect Behavioral Finance is a recent field of study which contradicts the presupposition supported by ModernFinance that decision makers act rationally. Prospect Theory, developed by Kahneman and Tversky (1979),is presented as an alternative model to the Theory of Expected Utility in relation to the way people decidein face of possibilities of risk. According to Prospect Theory, people define gains and losses based on a givenpoint of reference, which can be established on grounds of a given level of expected gain. This fact leads to theEndowment Effect - a behavioral trend investigated in this study whereby investors are influenced by aportfolio which they have received as an inheritance or endowment. The reason this occurs is that individualsusually define their expectations of gain according to the future profitability of the portfolio received, and notaccording to the future profitability of the market. Using an investment simulation, the Endowment Effectwas tested among 226 university students taking courses in the subject of capital markets. The resultsdemonstrate that the students were influenced by the different initial portfolios, which were randomlyassigned. 2007 artículo científico 1807-1821 https://www.redalyc.org/articulo.oa?id=76240802 https://www.redalyc.org/journal/762/76240802/ https://www.redalyc.org/journal/762/76240802/html/ https://www.redalyc.org/journal/762/76240802/76240802.epub https://www.redalyc.org/journal/762/76240802/movil en http://www.redalyc.org/revista.oa?id=762 Revista Contemporânea de Contabilidade application/pdf Universidade Federal de Santa Catarina Revista Contemporânea de Contabilidade (Brasil) Num.8 Vol.4 |
| title | Prospect Theory: A Study of the Endowment Effect |
| topic | Administración y Contabilidad Risk Prospect Theory Endowment Effect |
| url | https://www.redalyc.org/articulo.oa?id=76240802 https://www.redalyc.org/journal/762/76240802/ https://www.redalyc.org/journal/762/76240802/html/ https://www.redalyc.org/journal/762/76240802/76240802.epub https://www.redalyc.org/journal/762/76240802/movil |