Lewandowski, Michal
(2006):
*Is Cumulative Prospect Theory a Serious Alternative for the Expected Utility Paradigm?*

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## Abstract

The purpose of this paper is to demonstrate that Cumulative Prospect Theory is a serious alternative for Expected Utility Theory. It does not contradict Expected Utility, but includes it as a special example. A very useful example, because simple and yet very flexible, Expected Utility proved indispensable in many areas of economic analysis. Though a special example, because it does not capture some important effects observed in real choice behavior.

Item Type: | MPRA Paper |
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Original Title: | Is Cumulative Prospect Theory a Serious Alternative for the Expected Utility Paradigm? |

Language: | English |

Keywords: | Cumulative Prospect Theory, CPT, Expected Utility Theory, prospect stochastic dominance |

Subjects: | D - Microeconomics > D0 - General > D03 - Behavioral Microeconomics: Underlying Principles D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D81 - Criteria for Decision-Making under Risk and Uncertainty C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C91 - Laboratory, Individual Behavior |

Item ID: | 43271 |

Depositing User: | Michal Lewandowski |

Date Deposited: | 14 Dec 2012 14:04 |

Last Modified: | 01 Oct 2019 17:19 |

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URI: | https://mpra.ub.uni-muenchen.de/id/eprint/43271 |