This article reviews recent developments in the economic theory of individual decision
making under risk. Since the 1950s it has been known that individual choices violate the …

During the last 25 years, prospect theory and its successor, cumulative prospect theory,
replaced expected utility as the dominant descriptive theories of risky decision making …

Prospect Theory: For Risk and Ambiguity, provides a comprehensive and accessible
textbook treatment of the way decisions are made both when we have the statistical …

Empirical studies have shown that decision makers do not usually treat probabilities linearly.
Instead, people tend to overweight small probabilities and underweight large probabilities …

When individuals choose among risky alternatives, the psychological weight attached to an
outcome may not correspond to the probability of that outcome. In rank-dependent utility …

In this chapter, we present theories and applications of reference-dependent preferences.
We provide some historical perspective, but also move quickly to the current research …

This new monograph presents Dr. Luce's current understanding of the behavioral properties
people exhibit (or should exhibit) when they make selections among alternatives and how …

Cumulative Prospect Theory (CPT), the leading behavioral account of decisionmaking under
uncertainty, avoids the dominance violations implicit in Prospect Theory (PT) by assuming …

Many violations of the independence axiom of expected utility can be traced to subjects'
attraction to risk‐free prospects. The key axiom in this paper, negative certainty …

In this paper we investigate the attitudes toward risk of bettors in British horse races. The
model we use allows us to go beyond the expected utility framework and to explore various …