This paper documents that riskier firms with higher idiosyncratic volatility grant more stock options to nonexecutive employees. Standard models in the literature cannot easily explain this pattern; a ...

“PROSPECT theory” is an important contribution to the study of economics. It challenges some of the fundamental assumptions that economists have made concerning human behaviour. Daniel Kahneman, one ...

Prospect theory has emerged as a pivotal framework in understanding travel choice behaviour under uncertainty, offering a nuanced perspective that diverges from traditional expected utility theory.

Field experiment and household survey data are combined to investigate whether working in a risky occupation such as fishing makes fishermen have different risk preferences than individuals in other ...

This article is brought to you by our exclusive subscriber partnership with our sister title USA Today, and has been written by our American colleagues. It does not necessarily reflect the view of The ...