This paper analyzes the process behind the formation of mental accounts by an individual. The model is inspired by the Behavioral Life-Cycle Hypothesis of Shefrin and Thaler. It extends the traditional utility function to accomodate debt aversion. Then the model produces a consumption function with differentiated marginal propensities to consume out of different forms of wealth, which is the ma...

We provide easily verifiable conditions for the well-posedness of the optimal investment problem for a behavioral investor in an incomplete discrete-time multiperiod financial market model, for the first time in the literature. Under suitable assumptions we also establish the existence of optimal strategies. Keyword : Optimisation, existence and well-posedness in behavioral finance, “S-shaped” ...

One of the central goals of neuroeconomics is to understand the neural mechanisms that allow people to make decisions and act in ways that satisfy their preferences. In order to do so, neuroeconomists face something of a challenge ! they must strive to understand all aspects of our species’ decision-making strategies, including our systematic biases and seemingly irrational tendencies. Unfortun...

ehavioral finance can shed light on many areas of investing, including valuation. In this presentation, I will discuss some of the key behavioral phenomena and how they relate to particular issues associated with analyst perceptions about returns (namely, representativeness and affect). I will then compare returns for what I call “behavioral mean– variance portfolios” with those of traditional ...

Conventional and modern finance is related to various theories concepts that has done respectable job in financial market providing guidance for strategic decisions. Among all, emerging behavior come up with psychological sociological issues affects the choices are often ignored by modernized theories. This paper will elaborate concept of its relation Efficient Market Hypothesis. The helps us k...

The determinants of risk tolerance play an essential role in asset pricing. In this paper, I develop and test empirically a behavioral model of investor risk strategies. Difficulty in quantifying many of the elements of behavioral theories has so far necessitated experimental, rather than empirical, evaluation of most such models. Therefore, the methodology employed in this paper – testing a be...

We address the problem of identifying remnants of satellite galaxies in the halo of our galaxy with Gaia data. We make use of N-body simulations of dwarf galaxies being disrupted in the halo of our galaxy combined with a Monte Carlo model of the Milky Way galaxy. The models are converted to a simulated Gaia catalogue containing a realistic number (∼ 10 8 –10 9) of stars. The simulated catalogue...