Journal of Mathematical Psychology
Optimal Conflict in Preference Assessment
Management Science
The Shape of Utility Functions and Organizational Behavior
Management Science
The Effect of Reference Point on Stochastic Network Equilibrium
Transportation Science
The Effect of Reference Point on Stochastic Network Equilibrium
Transportation Science
Additive Utility in Prospect Theory
Management Science
A Quantitative Measurement of Regret Theory
Management Science
Preference elicitation for risky prospects
Proceedings of the 9th International Conference on Autonomous Agents and Multiagent Systems: volume 1 - Volume 1
Understanding the Two Components of Risk Attitudes: An Experimental Analysis
Management Science
The Midweight Method to Measure Attitudes Toward Risk and Ambiguity
Management Science
Preference Reversals Under Ambiguity
Management Science
UAI'02 Proceedings of the Eighteenth conference on Uncertainty in artificial intelligence
Expert Systems with Applications: An International Journal
Risk decision analysis in emergency response: A method based on cumulative prospect theory
Computers and Operations Research
| Hi-index | 0.01 |
An important reason why people violate expected utility theory is probability weighting. Previous studies on the probability weighting function typically assume a specific parametric form, exclude heterogeneity in individual preferences, and exclusively consider monetary decision making. This study presents a method to elicit the probability weighting function in rank-dependent expected utility theory that makes no prior assumptions about the functional form of the probability weighting function. We use both aggregate and individual subject data, thereby allowing for heterogeneity of individual preferences, and we examine probability weighting in a new domain, medical decision making. There is significant evidence of probability weighting both at the aggregate and at the individual subject level. The modal probability weighting function is inverse S-shaped, displaying both lower subadditivity and upper subadditivity. Probability weighting is in particular relevant at the boundaries of the unit interval. Compared to studies involving monetary outcomes, we generally find more elevation of the probability weighting function. The robustness of the empirical findings on probability weighting indicates its importance. Ignoring probability weighting in modeling decision under risk and in utility measurement is likely to lead to descriptively invalid theories and distorted elicitations.