Risk Aversion Or Myopia? Choices in Repeated Gambles and Retirement Investments

  title={Risk Aversion Or Myopia? Choices in Repeated Gambles and Retirement Investments},
  author={Shlomo Benartzi and Richard H. Thaler},
  journal={Management Science},
We study how decision makers choose when faced with multiple plays of a gamble or investment. When evaluating multiple plays of a simple mixed gamble, a chance to win x or lose y, subjects show a sensitivity to the amount to lose on a single trial, holding the distribution of returns for the portfolio constant; that is, they display "myopic loss aversion." Many subjects who decline multiple plays of such a gamble will accept it when shown the resulting distribution. This analysis is applied to… 

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