Question
List (without discussing in detail) two puzzles in individual trading behavior and/or in aggregate asset prices that can be explained if investors have Prospect Theory
List (without discussing in detail) two puzzles in individual trading behavior and/or in aggregate asset prices that can be explained if investors have Prospect Theory preferences. In each case, which features of Prospect Theory are the key ingredients in explaining the puzzle?
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Foundations of Macroeconomics
Authors: Robin Bade, Michael Parkin
8th edition
134492005, 978-0134492001
