Prospect Theory (1979) and its Cumulative version (1992) argue for probability weighting to explain lottery choices. Decision Utility Theory presents an alternative solution, which makes no use of this concept. The new theory distinguishes decision and perception utility, postulates a double...

Prospect Theory (1979) and its Cumulative version (1992) argue for probability weighting to explain lottery choices. Decision Utility Theory presents an alternative solution, which makes no use of this concept. The new theory postulates a double S-shaped decision utility curve similar to the one...

This short paper demonstrates that the claim of Cumulative Prospect Theory (CPT) that people are risk seeking for loss prospects appears to be merely a result of using a specific form of the probability weighting function to estimate the power factor of the value function. Using experimental...

We introduce range and sign dependent utility, an integrative behavioral model for uncertain cash flows. For gambles played today, the model can be seen as an extension of original prospect theory based on range, rather than rank. For single future payouts, the model agrees with hyperbolic...

We introduce range utility theory, an integrative behavioral model for uncertain cash flows. The model modifies rank dependent utility, by replacing rank principles with range principles, and extends the domain to time. For gambles played in the future, the model generalizes the probability and...