Reasons for Rank-Dependent Utility Evaluation

Elke U Weber and Britt Kirsner

Journal of Risk and Uncertainty, 1997, vol. 14, issue 1, 61 pages

Abstract: Three reasons for why people may evaluate utility in a rank-dependent fashion have been suggested: (a) rank-dependent weighting is a function of perceptual biases and thus not prescriptively defensible; (b) weights are (re)distributed by motivational processes that reflect stable personality characteristics of the decision maker; and (c) weights are (re)distributed as a function of the situation, allowing rank-dependent evaluation to be a rational response to an environment with asymmetric loss functions. By modifying a study by Wakker, Erev, and Weber (1994) we show that all three processes--that is, perceptual biases, individual predispositions in weighting, as well as rational adaptation to an asymmetric loss function--can be involved in rank-dependent weighting. Copyright 1997 by Kluwer Academic Publishers

Date: 1997
References: Add references at CitEc
Citations: View citations in EconPapers (29)

Downloads: (external link)
http://journals.kluweronline.com/issn/0895-5646/contents link to full text (text/html)
Access to full text is restricted to subscribers.

Related works:
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:14:y:1997:i:1:p:41-61

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 () and Springer Nature Abstracting and Indexing ().