Cumulative prospect theory (CPT) has been proposed as an alternative to expected utility theory to explain irregular … contribution is on the transformation of objective probability, which is commonly referred as probability weighting function. We …

theory of quantifiable beliefs - a form of probabilistic sophistication that does not preclude state-dependent preferences … and does not require the reduction of compound lotteries. The theory includes the state-dependent expected utility model … special cases. The theory is flexible enough to admit recursivity in the decision-making process. One specific example of this …

" probability distribution that assigns equal probabilities to the specified events, then insufficiently adjusts those probabilities …