Risk Attitudes and Decision Weights
November 1995
Article
volume 63, issue 6 pp 1255-1280.
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To accommodate the observed pattern of risk-aversion and risk-seeking, as well as common violations of expected utility (e.g., the certainty effect), we introduce and characterize a weighting function according to which an event has greater impact when it turns impossibility into possibility, or possibility into certainty, that when it merely makes a possibility more or less likely. We show how to compare such weighting functions (of different individuals) with respect to the degree of departure from expected utility, and we present a method for comparing an individual's weighting functions for risk and for uncertainty.
Keywords
Automatically Extracted Terms
- condition
- uncertainty
- prospect
- probability
- function
- event
- utility
- source
- preference
- boundary
- decision
- value
- tversky
- weighting
- theory
- right
- outcome
- cpt difference
- weighting function
- wakker
