On the predictions of cumulative prospect theory for third and fourth order risk preferences

DOI10.1007/S11238-022-09920-WMaRDI QIDQ6176322zbMATH OpenOpenAlexFDO

Authors Ivan Paya, David Peel, Konstantinos Georgalos

Publication date 22 August 2023

Published in Theory and Decision (Search for Journal in Brave)

Copyright license Creative Commons Attribution 4.0 International

Full work available at URL https://doi.org/10.1007/s11238-022-09920-w

zbMATH Keywords

cumulative prospect theorydecision making under riskexperimentshigher-order risk preferencesreflection effect

Mathematics Subject Classification ID

Decision theory (91B06) Utility theory (91B16)

Recommendations

• Consistency of higher order risk preferences
• Third-generation prospect theory
• The behavioural components of risk aversion
• Advances in prospect theory: cumulative representation of uncertainty
• Stability of risk preferences and the reflection effect of prospect theory

Cites work

• A tractable method to measure utility and loss aversion under prospect theory
• Advances in prospect theory: cumulative representation of uncertainty
• All over the map: A worldwide comparison of risk preferences
• Apportioning of risks via stochastic dominance
• Consistency of higher order risk preferences
• Exploring higher order risk effects
• Gender, financial risk, and probability weights
• Higher order risk attitudes, demographics, and financial decisions
• Risk apportionment: the dual story
• Risk Attitudes and Decision Weights
• Testing for prudence and skewness seeking
• The Dual Theory of Choice under Risk

Cited in

(2)

• Four notions of mean-preserving increase in risk, risk attitudes and applications to the rank-dependent expected utility model
• On skew preference or non-skew preference of a CPT DM revealed in lottery choices with three payoffs

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