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From the viewpoint of the independence axiom of expected utility theory, an interesting empirical dynamic choice problem involves the presence of a “global risk,” that is, a chance of losing everything whichever safe or risky option is chosen. In this experimental study, participants have to...
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experiments. In the first experiment, we elicit the value and probability weighting functions both under known and unknown … probability transformations rather than utility transformations. In the second experiment, we examine the effects of an increase …
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