A note on the utility function under prospect theory

We show that preference-homogeneity and loss-aversion are necessary and sufficient for the value function to have the power form with identical powers for gains and losses and for the probability weighting functions for gains and losses to be identical.

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Year of publication:	2008
Authors:	al-Nowaihi, Ali ; Bradley, Ian ; Dhami, Sanjit
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 99.2008, 2, p. 337-339
Publisher:	Elsevier

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Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005307629