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  1. Folk Psychology and the Interpretation of Decision Theory.Johanna Thoma - 2020 - Ergo: An Open Access Journal of Philosophy 7.
    Most philosophical decision theorists and philosophers of the social sciences believe that decision theory is and should be in the business of providing folk psychological explanations of choice behaviour, and that it can only do so if we understand the preferences, utilities and probabilities that feature in decision-theoretic models as ascriptions of mental states not reducible to choice. The behavioural interpretation of preference and related concepts, still common in economics, is consequently cast as misguided. This paper argues that even those (...)
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  • Preference reversals in judgment and choice.Marcus Selart - 1994 - Gothenburg University Press.
    According to normative decision theory there exists a principle of procedure invariance which states that a decision maker's preference order should remain the same, independently of which response mode is used. For example, the decision maker should express the same preference independently of whether he or she has to judge or decide. Nevertheless, previous research in behavioral decision making has suggested that judgments and choices yield different preference orders in both the risky and the riskless domain. In the latter, the (...)
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  • Detecting heterogeneous risk attitudes with mixed gambles.Luís Santos-Pinto, Adrian Bruhin, José Mata & Thomas Åstebro - 2015 - Theory and Decision 79 (4):573-600.
    We propose a task for eliciting attitudes toward risk that is close to real-world risky decisions which typically involve gains and losses. The task consists of accepting or rejecting gambles that provide a gain with probability p\documentclass[12pt]{minimal} \usepackage{amsmath} \usepackage{wasysym} \usepackage{amsfonts} \usepackage{amssymb} \usepackage{amsbsy} \usepackage{mathrsfs} \usepackage{upgreek} \setlength{\oddsidemargin}{-69pt} \begin{document}$$p$$\end{document} and a loss with probability 1-p\documentclass[12pt]{minimal} \usepackage{amsmath} \usepackage{wasysym} \usepackage{amsfonts} \usepackage{amssymb} \usepackage{amsbsy} \usepackage{mathrsfs} \usepackage{upgreek} \setlength{\oddsidemargin}{-69pt} \begin{document}$$1-p$$\end{document}. We employ finite mixture models to uncover heterogeneity in risk preferences and find that behavior is heterogeneous, with one half (...)
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  • Risk aversion elicitation: reconciling tractability and bias minimization. [REVIEW]Mohammed Abdellaoui, Ahmed Driouchi & Olivier L’Haridon - 2011 - Theory and Decision 71 (1):63-80.
    Risk attitude is known to be a key determinant of various economic and financial choices. Behavioral studies that aim to evaluate the role of risk attitudes in contexts of this type, therefore, require tools for measuring individual risk tolerance. Recent developments in decision theory provide such tools. However, the methods available can be time consuming. As a result, some practitioners might have an incentive to prefer “fast and frugal” methods to clean but more costly methods. In this article, we focus (...)
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  • A parametric analysis of prospect theory’s functionals for the general population.Adam S. Booij, Bernard M. S. van Praag & Gijs van de Kuilen - 2010 - Theory and Decision 68 (1-2):115-148.
    This article presents the results of an experiment that completely measures the utility function and probability weighting function for different positive and negative monetary outcomes, using a representative sample of N = 1,935 from the general public. The results confirm earlier findings in the lab, suggesting that utility is less pronounced than what is found in classical measurements where expected utility is assumed. Utility for losses is found to be convex, consistent with diminishing sensitivity, and the obtained loss-aversion coefficient of (...)
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  • Preference reversal in quantum decision theory.Vyacheslav I. Yukalov & Didier Sornette - 2015 - Frontiers in Psychology 6.
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  • Risk preferences of Australian academics: where retirement funds are invested tells the story.Pavlo R. Blavatskyy - 2016 - Theory and Decision 80 (3):411-426.
    Risk preferences of Australian academics are elicited by analyzing the aggregate distribution of their retirement funds across available investment options. Not more than 10 % of retirement funds are invested as if their owners maximize expected utility under the assumption of constant relative risk aversion with an empirically plausible level of risk aversion. An implausibly high level of risk aversion is required to rationalize any investment into bonds when stocks are available. Not more than 36.54 % of all investments can (...)
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  • The bipolar Choquet integral representation.Salvatore Greco & Fabio Rindone - 2014 - Theory and Decision 77 (1):1-29.
    Cumulative Prospect Theory is the modern version of Prospect Theory and it is nowadays considered a valid alternative to the classical Expected Utility Theory. Cumulative Prospect theory implies Gain-Loss Separability, i.e., the separate evaluation of losses and gains within a mixed gamble. Recently, some authors have questioned this assumption of the theory, proposing new paradoxes where the Gain-Loss Separability is violated. We present a generalization of Cumulative Prospect Theory which does not imply Gain-Loss Separability and is able to explain the (...)
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  • A parametric analysis of prospect theory’s functionals for the general population.Adam Booij, Bernard Praag & Gijs Kuilen - 2010 - Theory and Decision 68 (1-2):115-148.
    This article presents the results of an experiment that completely measures the utility function and probability weighting function for different positive and negative monetary outcomes, using a representative sample of N = 1,935 from the general public. The results confirm earlier findings in the lab, suggesting that utility is less pronounced than what is found in classical measurements where expected utility is assumed. Utility for losses is found to be convex, consistent with diminishing sensitivity, and the obtained loss-aversion coefficient of (...)
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  • Making trade-offs: A probabilistic and context-sensitive model of choice behavior.Claudia González-Vallejo - 2002 - Psychological Review 109 (1):137-155.
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  • Risk Attitude in Decision Making: In Search of Trait-Like Constructs.Eldad Yechiam & Eyal Ert - 2011 - Topics in Cognitive Science 3 (1):166-186.
    We evaluate the consistency of different constructs affecting risk attitude in individuals’ decisions across different levels of risk. Specifically, we contrast views suggesting that risk attitude is a single primitive construct with those suggesting it consists of multiple latent components. Additionally, we evaluate such constructs as sensitivity to losses, diminishing sensitivity to increases in payoff, sensitivity to variance, and risk acceptance (the willingness to accept probable outcomes over certainty). In search of trait-like constructs, the paper reviews experimental results focusing on (...)
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  • Delayed probabilistic risk attitude: a parametric approach.Jinrui Pan, Craig S. Webb & Horst Zank - 2019 - Theory and Decision 87 (2):201-232.
    Experimental studies suggest that individuals exhibit more risk aversion in choices among prospects when the payment and resolution of uncertainty are immediate relative to when it is delayed. This leads to preference reversals that cannot be attributed to discounting. When data suggest that utility is time-independent, probability weighting functions, such as those used to model prospect theory preferences, can accommodate such reversals. We propose a simple descriptive model with a two-parameter probability weighting function where one of these parameters depends on (...)
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  • The Limits of Unification for Theory Appraisal: A Case of Economics and Psychology.Michiru Nagatsu - 2013 - Synthese 190 (2):2267-2289.
    In this paper I examine Don Ross’s application of unificationism as a methodological criterion of theory appraisal in economics and cognitive science. Against Ross’s critique that explanations of the preference reversal phenomenon by the ‘heuristics and biases’ programme is ad hoc or ‘Ptolemaic’, I argue that the compatibility hypothesis, one of the explanations offerd by this programme, is theoretically and empirically well-motivated. A careful examination of this hypothesis suggests several strengths of a procedural approach to modelling cognitive processes underlying individual (...)
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  • A Dynamic, Stochastic, Computational Model of Preference Reversal Phenomena.Joseph G. Johnson & Jerome R. Busemeyer - 2005 - Psychological Review 112 (4):841-861.
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  • Violations of coalescing in parametric utility measurement.Andreas Glöckner, Baiba Renerte & Ulrich Schmidt - 2020 - Theory and Decision 89 (4):471-501.
    The majority consensus in the empirical literature is that probability weighting functions are typically inverse-S shaped, that is, people tend to overweight small and underweight large probabilities. A separate stream of literature has reported event-splitting effects and shown that they can explain violations of expected utility. This leads to the questions whether the observed shape of weighting functions is a mere consequence of the coalesced presentation and, more generally, whether preference elicitation should rely on presenting lotteries in a canonical split (...)
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  • Nonlinear decision weights or moment-based preferences? A model competition involving described and experienced skewness.Leonidas Spiliopoulos & Ralph Hertwig - 2019 - Cognition 183 (C):99-123.
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  • How (in)variant are subjective representations of described and experienced risk and rewards?David Kellen, Thorsten Pachur & Ralph Hertwig - 2016 - Cognition 157 (C):126-138.
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  • Risk behavior for gain, loss, and mixed prospects.Peter Brooks, Simon Peters & Horst Zank - 2014 - Theory and Decision 77 (2):153-182.
    This study extends experimental tests of (cumulative) prospect theory (PT) over prospects with more than three outcomes and tests second-order stochastic dominance principles (Levy and Levy, Management Science 48:1334–1349, 2002; Baucells and Heukamp, Management Science 52:1409–1423, 2006). It considers choice behavior of people facing prospects of three different types: gain prospects (losing is not possible), loss prospects (gaining is not possible), and mixed prospects (both gaining and losing are possible). The data supports the distinction of risk behavior into these three (...)
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  • Comparing attitudes toward time and toward money in experience-based decisions.Emmanuel Kemel & Muriel Travers - 2016 - Theory and Decision 80 (1):71-100.
    This paper reports an experimental comparison of attitudes toward time and toward money in experience-based decisions. Preferences were elicited under rank-dependent utility for prospects with two or three consequences expressed either in time or in monetary units. Probabilities were unknown but learned through sampling. More specifically, time and money were compared under two conditions. In a first experiment, both consequences and probabilities of prospects were unknown and learned through sequential sampling. In a second experiment, the possible consequences were revealed after (...)
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  • On probabilities and loss aversion.Horst Zank - 2010 - Theory and Decision 68 (3):243-261.
    This paper reviews the most common approaches that have been adopted to analyze and describe loss aversion under prospect theory. Subsequently, it is argued that loss aversion is a property of observable choice behavior and two new definitions of loss averse behavior are advocated. Under prospect theory, the new properties hold if the commonly used utility based measures of loss aversion are corrected by a probability based measure of loss aversion and their product exceeds 1. It is shown that prominent (...)
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  • Emotional balance and probability weighting.Narat Charupat, Richard Deaves, Travis Derouin, Marcelo Klotzle & Peter Miu - 2013 - Theory and Decision 75 (1):17-41.
    We find suggestive evidence that emotional balance has an impact on probability weighting incremental to demographic controls. Specifically, low negative affectivity (implying high emotional balance) tends to be a characteristic of those whose probability weighting functions exhibit lower curvature and more neutral elevation. In other words, emotional balance seems to push people in the direction of normative expected utility theory.
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  • Life and Death Decisions and COVID‐19: Investigating and Modeling the Effect of Framing, Experience, and Context on Preference Reversals in the Asian Disease Problem.Shashank Uttrani, Neha Sharma & Varun Dutt - 2022 - Topics in Cognitive Science 14 (4):800-824.
    Prior research in judgment and decision making (JDM) has investigated the effect of problem framing on human preferences. Furthermore, research in JDM documented the absence of such reversal of preferences when making decisions from experience. However, little is known about the effect of context on preferences under the combined influence of problem framing and problem format. Also, little is known about how cognitive models would account for human choices in different problem frames and types (general/specific) in the experience format. One (...)
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  • Moral preference reversals: Violations of procedure invariance in moral judgments of sacrificial dilemmas.Justin F. Landy, Benjamin A. Lemli, Pritika Shah, Alexander D. Perry & Rebekah Sager - 2024 - Cognition 252 (C):105919.
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  • The role of information search and its influence on risk preferences.Orestis Kopsacheilis - 2018 - Theory and Decision 84 (3):311-339.
    According to the ‘Description–Experience gap’, when people are provided with the descriptions of risky prospects they make choices as if they overweight the probability of rare events; but when making decisions from experience after exploring the prospects’ properties, they behave as if they underweight such probability. This study revisits this discrepancy while focusing on information-search in decisions from experience. We report findings from a lab-experiment with three treatments: a standard version of decisions from description and two versions of decisions from (...)
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  • Unique nontransitive measurement on finite sets.Peter C. Fishburn - 1990 - Theory and Decision 28 (1):21-46.
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  • Attribute attention and option attention in risky choice.Veronika Zilker & Thorsten Pachur - 2023 - Cognition 236 (C):105441.
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  • Skewness seeking: risk loving, optimism or overweighting of small probabilities?Thomas Åstebro, José Mata & Luís Santos-Pinto - 2015 - Theory and Decision 78 (2):189-208.
    In a controlled laboratory experiment we use one sample of college students and one of mature executives to investigate how positive skew influences risky choices. In reduced-form regressions we find that both students and executives make riskier choices when lotteries display positive skew. We estimate decision models to explore three explanations for skew seeking choices: risk-loving, optimism and likelihood insensitivity. We find no role for love for risk as neither students nor executives have convex utility. Both optimism and likelihood insensitivity (...)
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