Reconciling introspective utility with revealed preference: Experimental arguments based on prospect theory
نویسندگان
چکیده
منابع مشابه
Additive Utility in Prospect Theory
Prospect theory is currently the main descriptive theory of decision under uncertainty. It generalizes expected utility by introducing nonlinear decision weighting and loss aversion. A difficulty in the study of multiattribute utility under prospect theory is to determine when an attribute yields a gain or a loss. One possibility, which has been adopted in the existing theoretical literature on...
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Pioneered by American economist Paul Samuelson, revealed preference theory is based on the idea that the preferences of consumers are revealed in their purchasing behavior. Researchers in this field have developed complex and sophisticated mathematical models to capture the preferences that are “revealed” through consumer choice behavior. This study of consumer demand and behavior is closely ti...
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The transferable utility hypothesis underlies important theoretical results in household economics. We provide a revealed preference framework for bringing this (theoretically appealing) hypothesis to observational data. We establish revealed preference conditions that must be satisfied for observed household consumption behavior to be consistent with transferable utility. We also show that the...
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this article investigates fluctuations in stocks prices at tehran stock exchange, assuming that investors' utility stems from fluctuations in value of stocks as well as consumption. thus, the two behavioral phenomena discussed in prospect theory, i. e. loss aversion and house money effect, were factored into consumption-based asset pricing model and investor's utility function, which ...
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ژورنال
عنوان ژورنال: Journal of Econometrics
سال: 2007
ISSN: 0304-4076
DOI: 10.1016/j.jeconom.2006.05.025