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Testing between Alternative Models of Choice under Uncertainty: Comment

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  • Quiggin, John

Abstract

Battaglio, Kagel, and Jiranyakul use experimental tests to compare rank-dependent expected utility (RDEU), regret theory, prospect theory, and Machina's generalized smooth preferences model. They conclude that none of these models consistently organizes the data. The purpose of this note is to point out that RDEU theory was tested in combination with a hypothesis on the choice of functional form that has been explicitly rejected by the original author of the model (Quiggin, 1982, 1987). When the original form of RDEU theory is tested, it performs quite well. Copyright 1993 by Kluwer Academic Publishers

Suggested Citation

  • Quiggin, John, 1993. "Testing between Alternative Models of Choice under Uncertainty: Comment," Journal of Risk and Uncertainty, Springer, vol. 6(2), pages 161-164, April.
    • Handle: RePEc:kap:jrisku:v:6:y:1993:i:2:p:161-64
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    References listed on IDEAS

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    1. Hong, Chew Soo & Karni, Edi & Safra, Zvi, 1987. "Risk aversion in the theory of expected utility with rank dependent probabilities," Journal of Economic Theory, Elsevier, vol. 42(2), pages 370-381, August.
    2. Quiggin, John, 1982. "A theory of anticipated utility," Journal of Economic Behavior & Organization, Elsevier, vol. 3(4), pages 323-343, December.
    3. Battalio, Raymond C & Kagel, John H & Jiranyakul, Komain, 1990. "Testing between Alternative Models of Choice under Uncertainty: Some Initial Results," Journal of Risk and Uncertainty, Springer, vol. 3(1), pages 25-50, March.
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    Cited by:

    1. Harless, David W & Camerer, Colin F, 1994. "The Predictive Utility of Generalized Expected Utility Theories," Econometrica, Econometric Society, vol. 62(6), pages 1251-1289, November.
    2. Yuan-Sheng Lee & Hsu-Shih Shih, 2016. "Incremental analysis for generalized TODIM," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 24(4), pages 901-922, December.
    3. D. A. Peel & Jie Zhang & D. Law, 2008. "The Markowitz model of utility supplemented with a small degree of probability distortion as an explanation of outcomes of Allais experiments over large and small payoffs and gambling on unlikely outc," Applied Economics, Taylor & Francis Journals, vol. 40(1), pages 17-26.
    4. Giorgio Consigli & Asmerilda Hitaj & Elisa Mastrogiacomo, 2019. "Portfolio choice under cumulative prospect theory: sensitivity analysis and an empirical study," Computational Management Science, Springer, vol. 16(1), pages 129-154, February.
    5. Lu Zhang & Yuxin Yang & Xiaofeng Li, 2023. "Research on the Relationship between Agricultural Insurance Participation and Chemical Input in Grain Production," Sustainability, MDPI, vol. 15(4), pages 1-15, February.

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