Lottery-linked deposit accounts are financial assets that provide an interest rate determined by a lottery. The aim of this study is to determine the optimal design of these financial assets (under cumulative prospect theory (CPT) framework). We underline that the weighting functions usually...

The Cumulative Prospect Theory, as it was specified by Tversky and Kahneman (1992) does not explain the St Petersburg Paradox. This study shows that the solutions proposed in the literature (Blavatskky, 2005; Rieger and Wang, 2006) to guarantee, under rank dependant models, finite subjective...