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From expected utility theory to prospect theory: tracking down the experimental path after forty years

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  • Sławomir Kalinowski

Abstract

The expected utility theory axioms have been studied experimentally. Three of the experiments are a repetition of an earlier test in slightly changed circumstances, while the other two are original. The participants were incentivised with rewards, which did not happen in the replicated tests. The results confirmed the degeneration of the expected utility theory as a scientific research program. The evidence that resulted from the tests supported the hypothesis on the cumulative prospect theory predicting facts not forecasted by the EUT.

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  • Sławomir Kalinowski, 2020. "From expected utility theory to prospect theory: tracking down the experimental path after forty years," Operations Research and Decisions, Wroclaw University of Science and Technology, Faculty of Management, vol. 30(4), pages 39-56.
    • Handle: RePEc:wut:journl:v:30:y:2020:i:4:p:39-56:id:1555
    DOI: 10.37190/ord200403
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