EconPapers    
Economics at your fingertips  
 

Estimation of Peaked Densities Over the Interval [0,1] Using Two-Sided Power Distribution: Application to Lottery Experiments

Krzysztof Kontek ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper deals with estimating peaked densities over the interval [0,1] using two-sided power distribution (Kotz, van Dorp, 2004). Such data were encountered in experiments determining certainty equivalents of lotteries (Kontek, 2010). This paper summarizes the basic properties of the two-sided power distribution (TP) and its generalized form (GTP). The GTP maximum likelihood estimator, a result not derived by Kotz and van Dorp, is presented. The TP and GTP are used to estimate certainty equivalent densities in two data sets from lottery experiments. The obtained results show that even a two-parametric TP distribution provides more accurate estimates than the smooth three-parametric generalized beta distribution GBT (Libby, Novick, 1982) in one of the considered data sets. The three-parametric GTP distribution outperforms GBT for these data. The results are, however, the very opposite for the second data set, in which the data are greatly scattered. The paper demonstrates that the TP and GTP distributions may be extremely useful in estimating peaked densities over the interval [0,1] and in studying the relative utility function.

Keywords: Density Distribution; Maximum Likelihood Estimation; Lottery experiments; Relative Utility Function. (search for similar items in EconPapers)
JEL-codes: C01 C02 C13 C16 C21 C46 C51 C91 D03 D87 (search for similar items in EconPapers)
Date: 2010-04-28
New Economics Papers: this item is included in nep-cbe and nep-ecm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/22378/1/MPRA_paper_22378.pdf original version (application/pdf)

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:pra:mprapa:22378

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().

 
Page updated 2025-03-19
Handle: RePEc:pra:mprapa:22378