Rank dependent probability weighting---an integral part of cumulative prospect theory---has come to dominate the behavioral modeling of risk preferences in non-strategic settings over the last 40 years. We draw attention to some serious limitations of rank dependence when it comes to...

The Becker proposition (BP) is one of the founding pillars of the modern literature on Law and Economics. It states that it is optimal to impose the severest possible punishment (to maintain effective deterrence) at the lowest possible probability (to economize on enforcement costs). The BP is...