Dhami, Sanjit; al-Nowaihi, Ali - Department of Economics, Leicester University - 2005
dependent utility (RDU) and cumulative prospect theory (CP), use probability weighting functions. Existing probability weighting … is contrary to the evidence. Second, we introduce a new class of probability weighting functions, which we call higher … order Prelec probability weighting functions, that incorporate (i) and (ii). Third, we show that if RDU or CP are combined …