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New paradoxes of risky decision making
 Psychological Review
"... 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. Although these models account for the original Allais paradoxes, 11 new paradoxes show where prospect theories lead to sel ..."
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Cited by 42 (13 self)
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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. Although these models account for the original Allais paradoxes, 11 new paradoxes show where prospect theories lead to selfcontradiction or systematic false predictions. The new findings are consistent with and, in several cases, were predicted in advance by simple “configural weight ” models in which probabilityconsequence branches are weighted by a function that depends on branch probability and ranks of consequences on discrete branches. Although they have some similarities to later models called “rankdependent utility, ” configural weight models do not satisfy coalescing, the assumption that branches leading to the same consequence can be combined by adding their probabilities. Nor do they satisfy cancellation, the “independence ” assumption that branches common to both alternatives can be removed. The transfer of attention exchange model, with parameters estimated from previous data, correctly predicts results with all 11 new paradoxes. Apparently, people do not frame choices as prospects but, instead, as trees with branches.
Tests of rankdependent utility and cumulative prospect theory in gambles represented by natural frequencies: Effects of format, event framing, and branch splitting
 ORGANIZATIONAL BEHAVIOR AND HUMAN DECISION PROCESSES
, 2004
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A comparison of five models that predict violations of firstorder stochastic dominance in risky decision making
 Journal of Risk and Uncertainty
"... Five descriptive models of risky decision making are tested in this article, including four quantitative models and one heuristic account. Seven studies with 1802 participants were conducted to compare accuracy of predictions to new tests of first order stochastic dominance. Although the heuristic m ..."
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Cited by 25 (17 self)
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Five descriptive models of risky decision making are tested in this article, including four quantitative models and one heuristic account. Seven studies with 1802 participants were conducted to compare accuracy of predictions to new tests of first order stochastic dominance. Although the heuristic model was a contender in previous studies, it can be rejected by the present data, which show that incidence of violations varies systematically with the probability distribution in the gambles. The majority continues to violate stochastic dominance even when two of three branches have higher consequences in the dominant gamble, and they persist in mixed gambles even when probability to win is higher and probability to lose is lower in the dominant gamble. The transfer of attention exchange model (TAX) was the most accurate model for predicting the results.
New tests of cumulative prospect theory and the priority heuristic: Probabilityoutcome tradeoff with branch splitting
 Judgment and Decision Making
"... tradeoff with branch splitting ..."
Onereason decision making in risky choice? A closer look at the priority heuristic
 Judgment and Decision Making
, 2008
"... Although many models for risky choices between gambles assume that information is somehow integrated, the recently proposed priority heuristic (PH) claims that choices are based on one piece of information only. That is, although the current reason for a choice according to the PH can vary, all othe ..."
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Cited by 19 (3 self)
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Although many models for risky choices between gambles assume that information is somehow integrated, the recently proposed priority heuristic (PH) claims that choices are based on one piece of information only. That is, although the current reason for a choice according to the PH can vary, all other reasons are claimed to be ignored. However, the choices predicted by the PH and other pieces of information are often confounded, thus rendering critical tests of whether decisions are actually based on one reason only, impossible. The current study aims to remedy this problem by manipulating the number of reasons additionally in line with the choice implied by the PH. The results show that participants’ choices and decision times depend heavily on the number of reasons in line with the PH — thus contradicting the notion of noncompensatory, onereason decision making.
An empirical test of gainloss separability in prospect theory
 Management Science
, 2008
"... Abstract We investigate a basic premise of prospect theory, that the valuation of gains and losses is separable. In prospect theory, gainloss separability implies that a mixed gamble is valued by summing the valuations of the gain and loss portions of that gamble. Two experimental studies demonstra ..."
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Cited by 14 (1 self)
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Abstract We investigate a basic premise of prospect theory, that the valuation of gains and losses is separable. In prospect theory, gainloss separability implies that a mixed gamble is valued by summing the valuations of the gain and loss portions of that gamble. Two experimental studies demonstrate a systematic violation of the double matching axiom, an axiom that is necessary for gainloss separability. We document a reversal between preferences for mixed gambles and the associated gain and loss gambles—mixed gamble A is preferred to mixed gamble B, but the gain and loss portions of B are preferred to the gain and loss portions of A. The observed choice patterns are consistent with a process in which individuals are less sensitive to probability differences when choosing among mixed gambles than when choosing among either gain or loss gambles. Key Words Risky choice, prospect theory, mixed gambles, double matching, probability weighting function. ∗We thank Manel Baucells, Han Bleichrodt, David Budescu, Philippe Delquie, John Payne, Suzanne Shu, Horst Zank, and Jiao Zhang for their comments and help with this paper. We give the usual special thanks to Peter Wakker for his thorough and insightful comments. We also thank Jim Smith for his guidance in shaping this research. The
Gainloss separability and coalescing in risky decision making
 Management Science
, 2007
"... doi 10.1287/mnsc.1060.0592 ..."
Dimension integration: Testing models without tradeoffs
 ORGANIZATIONAL BEHAVIOR AND HUMAN DECISION PROCESSES
, 2008
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Testing lexicographic semiorders as models of decision . . .
 JOURNAL OF MATHEMATICAL PSYCHOLOGY
, 2010
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