the two main components of prospect theory, the value function and the probability weighting function, are complements in … probabilities. Behavior as described by prospect theory might therefore be evolution’s second-best solution to the fitness … probability weighting functions. -- Probability Weighting ; Prospect Theory ; Evolution of Preferences …

The Prospect Theory proposes to assess outcomes relative to a reference point (or benchmark). Although the literature … recognises the relevance of dynamic benchmarks, most of the applications of Prospect Theory employ static reference points (or a … status quo). This paper aims to develop a Prospect Theory framework for investment under uncertainty subject to a dynamic …

expected utility theory, but also prospect theory. …

This study compares the performance of Prospect Theory versus Stochastic Expected Utility Theory at fitting data on … Allais paradox or the fourfold pattern of risk attitudes. Stochastic Expected Utility Theory parsimoniously extends the … standard microeconomic model, whereas Prospect Theory, the benchmark for aggregate choice so far, is based on psychological …