Expectations, Disappointment, and Rank-Dependent Probability Weighting
AbstractWe develop a model of Disappointment in which disappointment and elation arise from comparing the outcome received, not with an expected value as in previous models, but rather with the other individual outcomes of the lottery. This approach may better reflect the way individuals are liable to experience disappointment. The model obtained accounts for classic behavioral deviations from the normative theory, offers a richer structure than previous disappointment models, and leads to a Rank-Dependent Utility formulation in a transparent way. Thus, our disappointment model may provide a clear psychological rationale for the subjective transformation of probabilities. Copyright Springer 2006
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Bibliographic InfoArticle provided by Springer in its journal Theory and Decision.
Volume (Year): 60 (2006)
Issue (Month): 2 (05)
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Web page: http://www.springerlink.com/link.asp?id=100341
disappointment theory; expected utility violations; probability weighting; rank-dependent utility;
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- David Gill & Victoria Prowse, 2011.
"A Structural Analysis of Disappointment Aversion in a Real Effort Competition,"
2011001, University of Oxford, Nuffield College.
- David Gill & Victoria Prowse, 2012. "A Structural Analysis of Disappointment Aversion in a Real Effort Competition," American Economic Review, American Economic Association, vol. 102(1), pages 469-503, February.
- Gill, David & Prowse, Victoria, 2009. "A Structural Analysis of Disappointment Aversion in a Real Effort Competition," IZA Discussion Papers 4536, Institute for the Study of Labor (IZA).
- Gill, David & Prowse, Victoria Liza, 2010. "A structural analysis of disappointment aversion in a real effort competition," Discussion Paper Series In Economics And Econometrics 1006, Economics Division, School of Social Sciences, University of Southampton.
- Victoria Prowse & David Gill, 2009. "A Structural Analysis of Disappointment Aversion in a Real Effort Competition," Economics Series Working Papers 448, University of Oxford, Department of Economics.
- Abdellaoui, Mohammed & Bleichrodt, Han, 2007. "Eliciting Gul's theory of disappointment aversion by the tradeoff method," Journal of Economic Psychology, Elsevier, vol. 28(6), pages 631-645, December.
- 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.
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