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Disappointment without prior expectation: a unifying perspective on decision under risk

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  • Philippe Delquié
  • Alessandra Cillo

Abstract

The central idea of Disappointment theory is that an individual forms an expectation about a risky alternative, and may experience disappointment if the outcome eventually obtained falls short of the expectation. We abandon the hypothesis of a well-defined prior expectation: disappointment feelings may arise from comparing the outcome received with anyof the gamble’s outcomes that the individual failed to get. This leads to a new, general form of Disappointment model. It encompasses Rank Dependent Utility with an explicit one-parameter probability transformation, and Risk-Value models with a generic risk measure including Variance, providing a unifying behavioral foundation for these models. Copyright Springer Science + Business Media, LLC 2006

Suggested Citation

  • Philippe Delquié & Alessandra Cillo, 2006. "Disappointment without prior expectation: a unifying perspective on decision under risk," Journal of Risk and Uncertainty, Springer, vol. 33(3), pages 197-215, December.
    • Handle: RePEc:kap:jrisku:v:33:y:2006:i:3:p:197-215
    DOI: 10.1007/s11166-006-0499-4
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    References listed on IDEAS

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