SP/A and CPT: A reconciliation of two behavioral decision theories

Marc Oliver Rieger

Economics Letters, 2010, vol. 108, issue 3, 327-329

Abstract: We show that security-potential-aspiration theory (SP/A) and cumulative prospect theory (CPT), although based on very different psychological principles are mathematically very similar when studied in the appropriate framework. This helps to interpret results on portfolio optimization under behavioral preferences.

Keywords: Decision; theory; Aspiration; level; Cumulative; prospect; theory; Behavioral; portfolio; optimization (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:108:y:2010:i:3:p:327-329

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