Prospect Theory and the Wisdom of the Inner Crowd

Hartmann, Stephan (23. July 2017): 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 (2014). Along the way we also suggest a new method for the aggregation of probabilities using statistical distances.

• Item Type: Journal article
• Keywords: Prospect Theory, Probability Aggregation, Kullback-Leibler Divergence
• Faculties: Philosophy, Philosophy of Science and Religious Science > Munich Center for Mathematical Philosophy (MCMP); Philosophy, Philosophy of Science and Religious Science > Munich Center for Mathematical Philosophy (MCMP) > Philosophy of Science
• Subjects: 100 Philosophy and Psychology > 100 Philosophy
• Language: English