Harin, Alexander
(2015):
*Problems of utility and prospect theories. A “certain–uncertain” inconsistency within their experimental methods.*

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## Abstract

In random–lottery incentive experiments, the choices of certain outcomes are stimulated by uncertain lotteries. This “certain–uncertain” inconsistency is evident, but only recently emphasized. Because of it, conclusions from a random–lottery incentive experiment that includes a certain outcome cannot be unquestionably correct. Well-known experimental results and purely mathematical theorems support this. The main result presented here is: The usual experimental systems of utility and prospect theories may need additional independent analyses in the context of the “certain–uncertain” inconsistency.

Item Type: | MPRA Paper |
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Original Title: | Problems of utility and prospect theories. A “certain–uncertain” inconsistency within their experimental methods |

Language: | English |

Keywords: | utility; prospect theory; experiment; incentive; random-lottery incentive system; Prelec; probability weighting function; |

Subjects: | C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General C - Mathematical and Quantitative Methods > C9 - Design of Experiments C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C90 - General C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C91 - Laboratory, Individual Behavior C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C93 - Field Experiments D - Microeconomics > D8 - Information, Knowledge, and Uncertainty D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D81 - Criteria for Decision-Making under Risk and Uncertainty |

Item ID: | 67911 |

Depositing User: | Alexander Harin |

Date Deposited: | 16 Nov 2015 22:22 |

Last Modified: | 27 Sep 2019 08:07 |

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URI: | https://mpra.ub.uni-muenchen.de/id/eprint/67911 |