We propose a memetic algorithm to optimize a consumption loan planning in economics. The planning is defined as an optimization problem which maximizes the household's one-year utility function with individual time preferences. Our memetic algorithm consists of an estimation of distribution algorithm for a global search and a heuristic local search for a local search. In the numerical experiments, we show the optimum solution for the consumption loan planning by using the memetic algorithm. From our results, we clarify the differences between the human behavior's solution in economic experiment and the optimum solution.

The authors experimentally investigate the existence of the disposition effect and its relationship with diminishing sensitivity. Their approach includes 3 key characteristics: (i) an environment closely resembling actual stock markets, (ii) individual-specific reference prices, and (iii) a direct test of diminishing sensitivity as a correlate of the disposition effect. They find strong support for the existence of the disposition effect as an independent hypothesis. This is an improvement over previous studies, which tested this hypothesis only jointly with others. The authors' results also strongly point to diminishing sensitivity, of the type postulated by prospect theory, being positively associated with the disposition effect.

[Abstract] In this note, we critically survey the literature on one of the most puzzling phenomena in financial markets to be discovered recently, namely the so-called disposition effect—the observation that stock market investors tend to hold on to their losing stocks for too long and sell their winning stocks too soon. While we argue its importance might be overstated to a large extent in terms of its significance for understanding individual investor behavior, we also offer some ideas that could lead to new, more robust theories capable of explaining the disposition effect. We argue there are fundamental behavioral forces behind the latter that connect with basic traits of human behavior, forces that should be the in the spotlight of research aiming to explain market phenomena with individual behavior.