Portal de Periódicos da CAPES

Psychological Expected Utility Theory and Anticipatory Feelings

2001; Oxford University Press; Volume: 116; Issue: 1 Linguagem: Inglês

10.1162/003355301556347

1531-4650

Andrew Caplin, John Leahy,

Economic theories and models

We extend expected utility theory to situations in which agents experience feelings of anticipation prior to the resolution of uncertainty. We show how these anticipatory feelings may result in time inconsistency. We provide an example from portfolio theory to illustrate the potential impact of anticipation on asset prices.