Why do investors sell losers? How adaptation to losses affects future capitulation decisions

According to disposition effect theory, people hold losing investments too long. However, many investors eventually sell at a loss, and little is known about which psychological factors contribute to these capitulation decisions. This study integrates prospect theory, utility maximization theory, and theory on reference point adaptation to argue that the combination of a negative expectation about an investment’s future performance and a low level of adaptation to previous losses leads to a greater capitulation probability. The test of this hypothesis in a dynamic experimental setting reveals that a larger total loss and longer time spent in a losing position lead to downward adaptations of the reference point. Negative expectations about future investment performance lead to a greater capitulation probability. Consistent with the theoretical framework, empirical evidence supports the relevance of the interaction between adaptation and expectation as a determinant of capitulation decisions. Keywords: Investments , Adaptation , Reference Point , Capitulation , Selling Decisions , Disposition Effect , Financial Markets JEL Classification: D91, D03, D8

Solar radiation force modeling for TDRS orbit determination

The relative orbit determination accuracies resulting from several TDRS models are evaluated. These models include spherical, single-plate, and restricted two-plate models. The plate models can be adjusted in both area and reflectivity through differential correction. The restricted two-plate model has an Earth-pointing plate and a solar plate; the orientation of the solar plate is restricted to rotation about an axis perpendicular to the satellite's orbital plane