We develop a theory of round-number bias via prospect theory and analog heuristics. * We test the prediction that bias is greatest in choices involving loss (cf. gain). * The theory is supported via analysis of both laboratory and real-world data. * Findings reveal the importance of the editing phase in prospect theory. * Findings have broad implications for inefficiencies in financial markets.
The prospect of a perfect ending: Loss aversion and the round-number bias
2015
Aufsatz (Zeitschrift)
Englisch
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