Outcome Bias Behavioral Finance. An identical outcome can cause more distress if its framed as a loss rather than as a missed opportunity for a gain. Outcome bias occurs in settings where ex-post outcomes influence an individuals judgements of a given situation although the ex ante information was identical Baron.
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Behavioral Finance is a compact and useful. Kevin Spellman aka oach. Lets look at just a few of the most common biases in behavioral finance.
An identical outcome can cause more distress if its framed as a loss rather than as a missed opportunity for a gain.
As you will see several biases can occur at the same time. Behavioral Finance is a compact and useful. Which impact the outcome and cannot be easily modeled in a finance equation. Loss Aversion As mentioned in The Origins of Behavioral Finance section of this paper loss aversion is the most salient feature of prospect theory.
