In many theories of decision under risk (e.g., expected utility theory, rank dependent utility theory, and prospect theory) the utility or value of a prospect is independent of other prospects or options in the choice set. The experiments presented here show a large effect of the available options set, suggesting instead that prospects are valued relative to one another. The judged certainty eq...

What effect does political instability in the form of a potential secession from union have on business formation? Using newly collected data creation, we show that entrepreneurial activity Ireland late nineteenth century was much lower than Scotland, and this divergence fluctuated over time. Several factors may contributed to this, but argue uncertainty about prospect devolved government playe...

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 ...

It is well known that human preferences in decisions under risk do not always complies with expected utility theory (EUT). In fact, there are several effects that are inconsistent with basic tenets of EUT. Alternative theories have been proposed and perhaps the most well studied is Prospect Theory (PT). Recent work showed experimental results that support the idea that financial professionals m...

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...

Purpose This paper aims to develop a model that supports public organisations in making informed strategic decisions as which services are most suitable be improved through co-creation. Thus, it first identifies the features make (un)suitable for co-creation and then applies this knowledge multi-criteria decision support assessment of their readiness. Design/methodology/approach The is result d...