Termin: 27 listopada 2017, godz. 12.15
Miejsce: sala 3/40
Prelegent: dr Michał Lewandowski (SGH)
Tytuł: Range and Sign Dependent Utility for Risk and Time
Autorzy:

Manel Baucells
Darden School of Business, University of Virginia, VA, USA. E-mail:
BaucellsM@darden.virginia.edu
Krzysztof Kontek
Warsaw School of Economics, Poland. E-mail: kontek@acnet.com.pl
Michal Lewandowski
Warsaw School of Economics, Poland. E-mail: michal.lewandowski@sgh.waw.pl

Abstract:
We propose Range and Sign Dependent Utility for risk and time (RSDU), a behavioral model to evaluate risky prospects, possibly with temporal delay. For multi-outcome lotteries, the model departs from cumulative prospect theory. Instead, RDU combines and extends the insights from the Range Dependent Utility model (RDU) and the Probability and Time Trade-off model (PTT) to produce a behavioral expected net present value rule. RDSU is able to explain the most robust anomalies (four-fold pattern, common ratio and common consequence, hyperbolic discounting, and the magnitude effect), as well as the preference reversal phenomenon which has eluded many descriptive theories of decision making. In addition to a reference point, the model hinges on a frame, a range that the decision maker uses to interpret the outcomes. The model is characterized by loss aversion and a sign dependent probability weighting function. The model is simpler to use than cumulative prospect theory because it does not require sorting outcomes from highest to lowest.