www.nytimes.com/interactive/...

I recently decided that I want to become "that person", here for the recommendations!

Thanks for the comment! We surely could take into account that the realized price will carry new information, but the experimental literature shows that it might be hard. Ngangoué and Weizsäcker show this difference in behavior with limit orders vs observed prices
www.aeaweb.org/articles?id=...

Paper link here!
drive.google.com/file/d/1No3h...

הלוואי שזה עלי! אתמול קראתי פוסט על איך מתישהו מגיעים למצב של אדישות. אני עוד לא שם לצערי אז לא יכולה להעיד

oops! here it is drive.google.com/file/d/1No3h...

the true return distribution is a mean-preserving spread of the one that agents in DCEE use.

Dynamic Cursed Expectations are defined for a general framework and can be applied to many different models of competitive markets, including a variety of applications in macroeconomics and finance. 15/15

This application suggests that asset overpricing can come from underestimation of the risk. When ‘good things go together’ and ‘bad things go together’, neglecting those correlations makes the agent consider a ‘less risky’ distribution: 14/

In DCEE, I would neglect that correlation. I would be correct about the marginal distribution of Tuesday’s price, and about the marginal distribution of Wednesday’s dividend, but not realize that the two are correlated. Under risk aversion, that leads to overpricing of the risky asset. 13/