Prospect Theory and the Wisdom of the Inner Crowd

Abstract

We give a probabilistic justification of the shape of one of the probability weighting functions used in Prospect Theory. To do so, we use an idea recently introduced by Herzog and Hertwig. Along the way we also suggest a new method for the aggregation of probabilities using statistical distances.

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2017

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Stephan Hartmann
Ludwig Maximilians Universität, München

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Prospect Theory: For Risk and Ambiguity.Peter P. Wakker - 2010 - Cambridge University Press.
Probabilistic Opinion Pooling.Franz Dietrich & Christian List - 2016 - In Alan Hájek & Christopher Hitchcock (eds.), The Oxford Handbook of Probability and Philosophy. Oxford: Oxford University Press.

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