This study compares the performance of Prospect Theory versus Stochastic Expected Utility Theory at fitting data on decision making under risk. Both theories incorporate well-known deviations from Expected Utility Maximization such as the Allais paradox or the fourfold pattern of risk attitudes....

We axiomatically characterise two new orders of desirability of gambles (risky assets) that are natural extensions of the proportional stochastic dominance order to complete orders. These orders are represented by indices with parallels to the recently introduced Aumann-Serrano index of...

We study preferences over lotteries that pay a xed prize at an uncertain future date: what we call time lotteries. The standard model of risk and time preferences, Expected Discounted Utility, implies that individuals must be risk seeking towards such lotteries (RSTL). In contrast, we show...