“Luce problem” and discontinuity of Prelec’s function at p = 1
Alexander Harin ()
MPRA Paper from University Library of Munich, Germany
This short paper is devoted to two items: 1) An analysis of Prelec’s weighting function at the probability p = 1 is highlighted (this analysis was performed by R. Duncan Luce in two articles with Ragnar Steingrimsson and János Aczél and here is referred to as the “Luce problem”). 2) The question of possible discontinuity of Prelec’s weighting function at p = 1 is specially considered, as a manifestation of importance of the “Luce problem.”
Keywords: Luce, Prelec; utility; prospect theory; probability weighting function (search for similar items in EconPapers)
JEL-codes: C1 C9 D8 D81 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:63672
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