Prospect theory, widely used descriptively for decisions under both risk and certainty, presumes concave utility over … participants gain-loss asymmetries are observed under risk. Our results imply that utility functions under conditions of certainty …

How does risk tolerance vary with stake size? This important question cannot be adequately answered if framing effects …, nonlinear probability weighting, and heterogeneity of preference types are neglected. We show that the increase in relative risk … to gains, no coherent change in relative risk aversion is observed for losses. These results not only challenge expected …