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Investment in education under disappointment aversion

Cerrone, C. ORCID: 0000-0003-1551-6723 & Anderberg, D. (2017). Investment in education under disappointment aversion. Economics Bulletin, 37(3), pp. 1533-1540.


This paper develops a model of risky investment in education under disappointment aversion, modelled as loss aversion around one's endogenous expectation. The model shows that disappointment aversion reduces investments in education for lower ability people and increases investments for higher ability people, thereby magnifying the gap between them generated by the riskiness of education.

Publication Type: Article
Additional Information: The article is published by Economics Bulletin as: Dan Anderberg and Claudia Cerrone, (2017) ''Investment in education under disappointment aversion'', Economics Bulletin, Volume 37, Issue 3, pages 1533-1540. The published article is reproduced in this repository in line with the publisher's terms.
Subjects: L Education > L Education (General)
Text - Accepted Version
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