Violations of Cumulative Prospect Theory in Mixed Gambles with Moderate Probabilities
AbstractIn 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.
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Bibliographic InfoArticle provided by INFORMS in its journal Management Science.
Volume (Year): 52 (2006)
Issue (Month): 8 (August)
cumulative prospect theory; expected utility; mixed gambles; stochastic dominance; individual decision making under risk;
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