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 …

are asymptotically equivalent. We illustrate the implications of this new theory with a simple simulation, an application …

Robust control theory is a tool for assessing decision rules when a decision maker distrusts either the specification … control theory to the so-called multiplier and constraint preferences that have been used to express ambiguity aversion …