Abstract
This study presents a testing approach to examine various models of probability weighting functions that are considered nonlinear functions of probability in behavioral decision theory, such as prospect theory. Although there are several empirical psychometric tests to examine probability weighting functions, there is no concrete method to examine these functions’ axiomatic properties. We propose axiomatic properties and a testing method to examine the generalized hyperbolic logarithmic model, power model, and exponential power model of the probability weighting functions, and provide an illustrative example of the testing method.
Original language | English |
---|---|
Article number | 48 |
Pages (from-to) | 1-8 |
Number of pages | 8 |
Journal | Frontiers in Applied Mathematics and Statistics |
Volume | 4 |
DOIs | |
Publication status | Published - 2018 |
Keywords
- Axiomatic approach
- Decision under risk
- Hyperbolic logarithmic discounting
- Probability weighting function
- Time discounting
ASJC Scopus subject areas
- Statistics and Probability
- Applied Mathematics