This book presents the definitive exposition of 'prospect theory', a compelling alternative to the classical utility theory of choice. Building on the 1982 volume, Judgement Under Uncertainty, this book brings together seminal papers on prospect theory from economists, decision theorists, and psychologists, including the work of the late Amos Tversky, whose contributions are collected here for the first time. While remaining within a rational choice framework, prospect theory delivers more accurate, empirically verified predictions in key test cases, as well as (...) helping to explain many complex, real-world puzzles. In this volume, it is brought to bear on phenomena as diverse as the principles of legal compensation, the equity premium puzzle in financial markets, and the number of hours that New York cab drivers choose to drive on rainy days. Theoretically elegant and empirically robust, this volume shows how prospect theory has matured into a new science of decision making. (shrink)

Having the ambition to contribute to the practical value of the theory on corporate social performance (CSP), this paper approaches the question whether CSP can contribute to the competitive advantage of firms. We adopted an explorative case-study methodology to explore the variety of positive and negative effects of CSP on the competitiveness of organizations. As this study aimed at identifying as great variety of these effects as possible, we selected a diversified group of respondents. Data was thus collected through embedded (...) units of analysis in a petrochemical company, and triangulated with the opinions of experts on CSP. Overall, we found various positive and negative effects of CSP on the competitiveness of organizations. CSP is therefore not an innocent adventure for executives, but rather a strategy for achieving corporate objectives. If not carefully implemented, the CSP strategy may harm the competitive advantage of the firm, as our results have suggested. (shrink)