Is Probability Weighting Sensitive to the Magnitude of Consequences? An Experimental Investigation on Losses
Nathalie Etchart-Vincent (nathalie.etchart-vincent@univ-paris1.fr)
Journal of Risk and Uncertainty, 2004, vol. 28, issue 3, 217-235
Abstract:
Experimental investigations of the probability weighting function over losses are scarce and all involve small payoffs. The paper aims to give new insight into the probability weighting function for losses, by eliciting it through a simple two-stage semi-parametric procedure over more realistic losses, and by investigating its sensitivity to the magnitude of the payoffs. Current data confirm previous evidence of convex utility functions and inverse-S-shaped weighting functions. Still, at least for small probabilities, probability weighting appears to be affected by the size of consequences: the larger the losses, the more aversive the gambles and the more pessimistic the subjects are.
Date: 2004
References: Add references at CitEc
Citations: View citations in EconPapers (94)
Downloads: (external link)
http://journals.kluweronline.com/issn/0895-5646/contents (text/html)
Access to full text is restricted to subscribers.
Related works:
Working Paper: Is Probability Weighting Sensitive to the Magnitude of Consequences? An Experimental Investigation on Losses (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:kap:jrisku:v:28:y:2004:i:3:p:217-235
Ordering information: This journal article can be ordered from
http://www.springer. ... ry/journal/11166/PS2
Access Statistics for this article
Journal of Risk and Uncertainty is currently edited by W. Kip Viscusi
More articles in Journal of Risk and Uncertainty from Springer
Bibliographic data for series maintained by Sonal Shukla (sonal.shukla@springer.com) and Springer Nature Abstracting and Indexing (indexing@springernature.com).