ISSN:
1573-0476
Keywords:
certainty equivalents
;
reference levels
;
rank- and sign-dependent utility
Source:
Springer Online Journal Archives 1860-2000
Topics:
Economics
Notes:
Abstract Choice is viewed as a derived, not a primitive, concept. Individual gambles are assigned subjective certainty equivalents (CE1); the choice setX has an associated reference level [RL(X)] based on the CE1S of its members; the outcomes of each gamble are recoded as deviations from the RL(X); and new CE2S are constructed. The gamble having the largest CE2 is chosen. The CEs are described by the rank-and sign-dependent theory of Luce (1992b). The concept of RL is studied axiomatically. The model predicts many behavioral anomalies and is tested with data sets of Mellers, Chang, Birnbaum, and Ordóñez (1992).
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1007/BF01065354
Permalink
