This paper discusses di€erences between prospect theory and cumulative prospect theory. It shows that cumulative prospect theory is not merely a formal correction of some theoretical problems in prospect theory, but it also gives di€erent predictions. Some experiments by Lola Lopes are re-analyzed, and are demonstrated to favor cumulative prospect theory over prospect theory. It turns out that ...

Original and cumulative prospect theory differ in the composition rule used to combine the probability weighting function and the value function. We test these composition rules by performing a novel test. We apply estimates of prospect theory’s weighting and value function obtained from two-outcome cash equivalents, a domain where original and cumulative prospect theory coincide, to three-outc...

The present study evaluated the learning objectives represented in the recent Iranian nation-wide ELT textbooks, i.e. Prospect and Vision series, and compared them to those in the internationally-published textbook of Four Corners. To this end, Bloom’s revised taxonomy of learning objectives was utilized as the analytical framework to scrutinize the tasks and exercises of the textbooks using a ...

This paper studies the effect of the space (distance) between lotteries' outcomes on risk-taking behavior and the shape of estimated utility and probability weighting functions. Previously investigated experimental data shows a significant space effect in the gain domain. As compared to low spaced lotteries, high spaced lotteries are associated with higher risk aversion for high probabilities o...

Levy and Levy (Management Science 2002) present data that, according to their claims, violate prospect theory. They suggest that prospect theory’s hypothesis of an S-shaped value function, concave for gains and convex for losses, is incorrect. However, all the data of Levy and Levy are perfectly consistent with the predictions of prospect theory, as can be verified by simply applying prospect t...

This paper proposes a modified model based on the PROSPECT-5 model to simulate the spectral reflectance of copper-stressed leaves. Compared with PROSPECT-5, the modified model adds the copper content of leaves as one of input variables, and the specific absorption coefficient related to copper (Kcu) was estimated and fixed in the modified model. The specific absorption coefficients of other bio...

We study asset prices in an economy where investors derive direct utility not. Our model is influenced by prospect theory and by experimental evidence on how.We study asset prices in an economy where investors derive direct utility not. Of our model is influenced by prospect theory and by experimental evidence on.PROSPECT THEORY AND ASSET PRICES Authors: N. The point of this note is to explain ...

Cumulative Prospect Theory of Tversky and Kahneman (1992) is the modern version of Prospect Theory (Kahneman and Tversky (1979)) and is nowadays considered a valid alternative to the classical Expected Utility Theory. Cumulative Prospect theory implies Gain-Loss Separability, i.e. the separate evaluation of losses and gains within a mixed gamble. Recently, some authors have questioned this assu...