Baltussen, Guido; Post, Thierry; Vliet, Pim van - In: Management Science 52 (2006) 8, pp. 1288-1290
In a classroom choice experiment with mixed gambles and moderate probabilities, we find severe violations of cumulative prospect theory (CPT) and of Markowitz stochastic dominance. Our results shed new light on the exchange between Levy and Levy (2002) and Wakker (2003) in this journal.