Organizational Behavior and Human Decision Processes, Volume 71, Issue2

This paper investigates two behavioral properties of choices between gambles: branch independence and distribution independence. Branch independence is the assumption that probability-outcome branches that are identical in two gambles being compared should have no effect on preference order. In the test of distribution independence, two middle outcomes of fixed probability are sandwiched between two extreme outcomes, common to both gambles, whose probabilities are varied. Distribution independence requires that preference order should be independent of the probability distribution of these common outcomes. Distribution independence is implied by original prospect theory and the configural weight model of Birnbaum and McIntosh (1996). For both properties, patterns of violations are opposite those predicted by the inverse-S weighting function used in the model of cumulative prospect theory by Tversky and Kahneman (1992). q 1997 Academic Press