In a classroom choice experiment with mixed gambles and moderate probabilities, we find severe violations of cumulative prospect theory (CPT) and of Markowitz stochastic dominance. Our results shed new light on the exchange between Levy and Levy (2002) and Wakker (2003) in this journal.

Additional Metadata
Keywords choice (psychology), correlation (statistics), game theory, management research, management science, mathematical statistics, probabilities, prospect theory, stochastic analysis
Persistent URL dx.doi.org/10.1287/mnsc.1050.0544, hdl.handle.net/1765/14065
Series ERIM Top-Core Articles
Journal Management Science
Citation
Baltussen, G, Post, G.T, & van Vliet, P. (2006). Violations of Cumulative Prospect Theory in Mixed Gambles with Moderate Probabilities. Management Science, 52(8), 1288–1290. doi:10.1287/mnsc.1050.0544