Exploring Bernoulli’s Prisoner’s Dilemma Through a Goals-Oriented Lens

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Bernoulli’s Prisoner’s Dilemma: A Goals-Based Perspective
  • In Bernoulli’s thought experiment, a rich prisoner valued money differently than a poorer man due to his specific objective of buying his freedom
  • Goals-based portfolio theory can be used to evaluate investments based on their alignment with an investor’s objectives
  • Different investors with different goals and time horizons may be willing to accept different returns for the same security
  • The marketplace of buyers and sellers, as well as investor liquidity, can influence security prices
  • Traditional theories like the efficient market hypothesis may not fully explain market behavior, while goals-based theory provides insights about investor behavior
  • Goals-based portfolio theory bridges the gap between normative and descriptive theories, offering a more rational perspective on investor behavior
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Author : Editorial Staff

Editorial Staff at FinancialAdvisor webportal is a team of experts. We have been creating blogs about finance & investment.

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