We provide evidence that classic lottery anomalies like probability weighting and loss
aversion are not special phenomena of risk. They also arise (and often with equal strength) …

This article documents the economic relevance of measuring cognitive uncertainty: people's
subjective uncertainty over their ex ante utility-maximizing decision. In a series of …

Behavioral finance tries to make sense of financial data using models that are based on
psychologically accurate assumptions about people's beliefs, preferences, and cognitive …

We present a new model of asset prices in which investors evaluate risk according to
prospect theory and examine its ability to explain 23 prominent stock market anomalies. The …

In this chapter, we present theories and applications of reference-dependent preferences.
We provide some historical perspective, but also move quickly to the current research …

Economic models are evaluated by testing the correctness of their predictions. We suggest
an additional measure,“completeness”: the fraction of the predictable variation in the data …

We provide evidence that the signature empirical patterns of prospect theory are not special
phenomena of risk. They also arise (and often with equal strength) when subjects evaluate …

We propose a theory of the complexity of economic decisions. Leveraging a macroeconomic
framework of production functions, we conceptualize the mind as a cognitive economy …

The canonical conclusion from research on age differences in risky choice is that older
adults are more risk averse than younger adults, at least in choices involving gains. Most of …

Abstract In Bernheim and Sprenger (2020) and Bernheim, Royer, and Sprenger (2022), we
devised and implemented a new test of rank-dependent probability weighting for Cumulative …