A note on the connection between the Tsallis’ thermodynamics and cumulative prospect theory
نویسندگان
چکیده
This note presents explicitly a strong connection between the Tsallis thermodynamics and the so-called prospect theory introduced to take into account agent’s decisions under risk. Moreover, using the cumulative prospect theory adapted here for a continuous framework, we show that if the Tsallis parameter q belongs to the interval [0,1], then the prospect theory requirement that extreme events are overvalued is satisfied.
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