Endogenous Prospect Theory

In previous models of (cumulative) prospect theory reference-dependence of preferences is imposed beforehand and the location of the reference point is exogenously determined. This paper provides an axiomatization of a new specification of cumulative prospect theory, termed endogenous prospect theory, where reference-dependence is derived from preference conditions and a unique reference point arises endogenously.

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Year of publication:	2010
Authors:	Schmidt, Ulrich ; Zank, Horst
Publisher:	Frankfurt a. M. : Verein für Socialpolitik
Subject:	prospect theory \| reference point \| diminishing sensitivity \| loss aversion

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Series:	Beiträge zur Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie - Session: Individual Decision Making Under Risk and Uncertainty ; F15-V3
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Conference Paper
Language:	English
Other identifiers:	655957103 [GVK] hdl:10419/37536 [Handle] RePEc:zbw:ifwkie:37536 [RePEc]
Classification:	D81 - Criteria for Decision-Making under Risk and Uncertainty ; C91 - Laboratory, Individual Behavior ; D80 - Information and Uncertainty. General
Source:	EconStor

Persistent link: https://www.econbiz.de/10010314358