Search Results - subject:"probability transformation"

Probabilistic Risk Attitudes and Local Risk Aversion: a Paradox

Sadiraj, Vjollca - Department of Economics, Andrew Young School of Policy … - 2012

Prominent theories of decision under risk that challenge expected utility theory model risk attitudes at least partly with transformation of probabilities. This paper shows how attributing local risk aversion (partly or wholly) to attitudes towards probabilities can produce extreme probability...

Persistent link: https://www.econbiz.de/10010548104

Can non-expected utility theories explain the paradox of not voting?

Blondel, Serge; Lévy-garboua, Louis - In: Economics Bulletin 31 (2011) 4, pp. 3158-3168

Many people vote in large elections with costs to vote although the expected benefits would seem to be infinitesimal to a rational mind. We exhibit two necessary conditions that a theory of rational decision must satisfy in order to solve the paradox. We then show that prospect and regret...

Persistent link: https://www.econbiz.de/10009364316

Risk Aversion as Attitude towards Probabilities: A Paradox

Cox, James C.; Sadiraj, Vjollca - Department of Economics, Andrew Young School of Policy … - 2011

Theories of decision under risk that challenge expected utility theory model risk attitudes at least partly with transformation of probabilities. We explain how attributing risk aversion (partly or wholly) to attitude towards probabilities, can produce extreme probability distortions that imply...

Persistent link: https://www.econbiz.de/10009144526

The internal consistency of the standard gamble: tests after adjusting for prospect theory

Oliver, Adam - London School of Economics (LSE) - 2003

incorporating loss weighting and probability transformation parameters in the standard gamble valuation procedure. Five alternatives … to the standard EU formulation are considered: (1) probability transformation within an EU framework; and, within a … prospect theory framework, (2) loss weighting and full probability transformation, (3) no loss weighting and full probability …

Persistent link: https://www.econbiz.de/10010928594