Compound invariance implies prospect theory for simple prospects
Behavioral conditions such as compound invariance for risky choice and constant decreasing relative impatience for intertemporal choice have surprising implications for the underlying decision model. They imply a multiplicative separability of outcomes and either probability or time. Hence the under...
| Main Authors: | , , , |
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| Other Authors: | |
| Format: | Article |
| Language: | en_US |
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Elsevier
2015
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| Online Access: | http://hdl.handle.net/1721.1/99122 https://orcid.org/0000-0002-9507-5368 |
| _version_ | 1826201940788248576 |
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| author | Bleichrodt, Han Kothiyal, Amit Prelec, Drazen Wakker, Peter P. |
| author2 | Massachusetts Institute of Technology. Department of Economics |
| author_facet | Massachusetts Institute of Technology. Department of Economics Bleichrodt, Han Kothiyal, Amit Prelec, Drazen Wakker, Peter P. |
| author_sort | Bleichrodt, Han |
| collection | MIT |
| description | Behavioral conditions such as compound invariance for risky choice and constant decreasing relative impatience for intertemporal choice have surprising implications for the underlying decision model. They imply a multiplicative separability of outcomes and either probability or time. Hence the underlying model must be prospect theory or discounted utility on the domain of prospects with one nonzero outcome. We indicate implications for richer domains with multiple outcomes, and with both risk and time involved. |
| first_indexed | 2024-09-23T11:59:43Z |
| format | Article |
| id | mit-1721.1/99122 |
| institution | Massachusetts Institute of Technology |
| language | en_US |
| last_indexed | 2024-09-23T11:59:43Z |
| publishDate | 2015 |
| publisher | Elsevier |
| record_format | dspace |
| spelling | mit-1721.1/991222022-10-01T07:28:01Z Compound invariance implies prospect theory for simple prospects Bleichrodt, Han Kothiyal, Amit Prelec, Drazen Wakker, Peter P. Massachusetts Institute of Technology. Department of Economics Sloan School of Management Prelec, Drazen Behavioral conditions such as compound invariance for risky choice and constant decreasing relative impatience for intertemporal choice have surprising implications for the underlying decision model. They imply a multiplicative separability of outcomes and either probability or time. Hence the underlying model must be prospect theory or discounted utility on the domain of prospects with one nonzero outcome. We indicate implications for richer domains with multiple outcomes, and with both risk and time involved. 2015-10-01T18:26:21Z 2015-10-01T18:26:21Z 2013-05 2012-04 Article http://purl.org/eprint/type/JournalArticle 00222496 1096-0880 http://hdl.handle.net/1721.1/99122 Bleichrodt, Han, Amit Kothiyal, Drazen Prelec, and Peter P. Wakker. “Compound Invariance Implies Prospect Theory for Simple Prospects.” Journal of Mathematical Psychology 57, no. 3–4 (June 2013): 68–77. https://orcid.org/0000-0002-9507-5368 en_US http://dx.doi.org/10.1016/j.jmp.2013.04.002 Journal of Mathematical Psychology Creative Commons Attribution http://creativecommons.org/licenses/by-nc-nd/4.0/ application/pdf Elsevier MIT web domain |
| spellingShingle | Bleichrodt, Han Kothiyal, Amit Prelec, Drazen Wakker, Peter P. Compound invariance implies prospect theory for simple prospects |
| title | Compound invariance implies prospect theory for simple prospects |
| title_full | Compound invariance implies prospect theory for simple prospects |
| title_fullStr | Compound invariance implies prospect theory for simple prospects |
| title_full_unstemmed | Compound invariance implies prospect theory for simple prospects |
| title_short | Compound invariance implies prospect theory for simple prospects |
| title_sort | compound invariance implies prospect theory for simple prospects |
| url | http://hdl.handle.net/1721.1/99122 https://orcid.org/0000-0002-9507-5368 |
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