On skew preference or non-skew preference of a CPT DM revealed in lottery choices with three payoffs

David Peel and Jie Zhang

Economics Letters, 2024, vol. 235, issue C

Abstract: In this letter we illustrate that the representative Cumulative Prospect Decision Maker when choosing between lotteries with three payoffs that exhibit the same probabilities of payoffs and expected return and variance can exhibit either skew preference or non-skew preference and consequently explain the conflicting experimental result reported in the literature.

Keywords: Cumulative prospect theory; Skewness; Kurtosis; Lotteries (search for similar items in EconPapers)
JEL-codes: C90 D80 D81 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:235:y:2024:i:c:s0165176524000338

DOI: 10.1016/j.econlet.2024.111549

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