I know the basic definition of myopic loss aversion but this strange link between myopic loss aversion and its effect on equity risk premium is new found. How does myopic loss aversion lead to increased equity risk premium?
It’s the same security valued at a lower price in the market when bought by the same investor, meaning that a higher rate of return is enticing investors to buy at the lower price. You aren’t selling because you’re simply valuing in a greater return for your holdings and deeming it worthwhile.
Not at all following you Jsobes 