According to prospect theory (Kahneman & Tversky, 1979), gains and losses are measured from current wealth, which serves as a reference point. We attempted to ascertain to what extent the reference point shifts following gains or losses. In questionnaire studies we asked subjects what stock...

It is well-known that expected utility (EU) has empirical deficiencies. Prospect theory (PT) has developed as an alternative with more descriptive validity. However, PT’s full function had not yet been quantified in the health domain. This paper is the first to simultaneously measure utility...

This short paper is devoted to two items: 1) An analysis of Prelec’s weighting function at the probability p = 1 is highlighted (this analysis was performed by R. Duncan Luce in two articles with Ragnar Steingrimsson and János Aczél and here is referred to as the “Luce problem”). 2) The...

A possibility of the existence of a discontinuity of Prelec’s (probability weighting) function W(p) at the probability p = 1 is discussed. This possibility is supported by the Aczél–Luce question whether Prelec’s weighting function W(p) is equal to 1 at p = 1, by the purely mathematical...

A need for experiments on the certainty effect near the certainty (near the probability p = 1) is stated in this paper. The need supported by the Aczél–Luce question whether Prelec’s weighting function W(p) is equal to 1 at p = 1, by the purely mathematical restrictions and the...

The aim of this paper is to introduce prospect theory in a game theoretic framework. We address the complexity of the weighting function by restricting the object of our analysis to a 2-player 2-strategy game, in order to derive some core results. We find that dominant and indifferent strategies...

This is a very draft version of the report "The random-lottery incentive system. Can p~1 experiments deductions be correct?". It is published to extend the abstract of the report. Aczél and Luce emphasized a fundamental question: whether W(1)=1 (whether the Prelec weighting function equals 1 at...

Three main groups of results have been obtained: 1) The question is emphasized whether the probability weighting function W(p) is continuous. If W(p) reveals a discontinuity at p=1, then this is a topological feature. This can qualitatively change (at least) the mathematical aspects of the...

A common finding in stated preference studies that measure the value of travel time (VTT) is that the measured VTT increases with the size of the time change considered, in conflict with standard neoclassical economic theory. We present a new test of a possible explanation for the phenomenon...