STOCHASTIC

MINIMAX POLICIES FOR SELLING AN ASSET AND DOLLAR AVERAGING 393
The question arises as to why sellers might not act as if they can repurchase. One
answer is that they may not consider taking advantage of every uptick and downtick
in price as a realistic alternative. Therefore, not having done so causes little regret.
On the other hand, missing a major turn in the market, given a decision to convert an
asset, is cause for considerable unhappiness. Another answer may be transaction costs
which might substantially lower the expected value of such a policy. Regret remains
an elusive psychological fact. The hope is that this paper has shown that it can be neglected
only at the peril of an incomplete understanding of behavior under risk.
References
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3. MODELS OF OPTION STRATEGY 591