This paper provides a simple approach for deriving cumulative prospect theory. The key axiom is a cumulative dominance axiom which requires that a prospect be judged more attractive if in it greater gains are more likely and greater losses are less likely. In the presence of this cumulative dominance, once a model is satisfied on a "sufficiently rich" domain, then it holds everywhere. This leads to highly transparent results.

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Kluwer Academic Publishers, Dordrecht etc.
hdl.handle.net/1765/23188
Erasmus School of Economics

Sarin, R.K, & Wakker, P.P. (1994). Gains and Losses in Nonadditive Expected Utility. Kluwer Academic Publishers, Dordrecht etc. Retrieved from http://hdl.handle.net/1765/23188