deviation (in beliefs, utility, or perceived prices) is within e of expected utility theory. The number e can then be used as a … distance to the theory. We apply our methodology to three recent large-scale experiments. Many subjects in those experiments …

extend to distinct PWFs in the gain and loss domains, as under prospect theory …

skewed risks. We show that salience theory of choice under risk can explain this preference for positive skewness, because … unlikely, but outstanding payoffs attract attention. In contrast to alternative models, however, salience theory predicts that … preferences—typically attributed to cumulative prospect theory—are more naturally accommodated by salience theory …

The theory of expected utility maximization (EUM) proposed by Bernoulli explains risk aversion as a consequence of …