We study how the framework of classical game theory changes when the preferences of the players are described by Prospect Theory instead of Expected Utility Theory. Specifically, we study the influence of framing effect and probability weighting on the existence and specific structure of Nash...

This paper considers the design problem of selling a unit good to a prospect theory buyer, with non-negative constraints on the realized price. When the value is private and the reservation value is 0, it is optimal for the seller to use a post binary random price mechanism, where he charges a...

This research aimed to replace the pairwise comparison function used in Leoneti [2016] with a new function inspired on the exponential model of prospect theory and to perform a comparative analysis to verify the hypothesis that a better performance of the utility function would be possible from...