According to prospect theory, people overweight low probability events and underweight high probability events. Several recent papers (notably, Hertwig, Barron, Weber & Erev, 2004) have argued that although this pattern holds for “description-based” decisions, in which people are explicitly provided with probability distributions over potential outcomes, it is actually reversed in “experience-b...

Article history: Received 23 February 2011 Received in revised form 25 April 2012 Accepted 3 May 2012 Available online 12 May 2012 A behavioral political economy framework is built on the basis of prospect theory to explain the induced and imposed institutional changes during China's market reform, giving special attention to the integrated effects of economic and political institutions. Accord...

We developed a novel decision-making paradigm that allows us to apply prospect theory in behavioral economics to body mass. 67 healthy young adults completed self-report measures and two decision-making tasks for weight-loss, as well as for monetary rewards. We estimated risk-related preference and loss aversion parameters for each individual, separately for weight-loss and monetary rewards cho...

This study examines the risk behaviour of a decision-maker regarding pricing decisions with aid newsvendor model. In this regard, prospect theory and reference point concept are adopted to formulate value function decision-maker. Unlike traditional points (quantity-based), is deemed price. It proved that convex combination maximum-expected profits expected losses represents point. Closed-form s...