Is there a plausible theory for decision under risk? a dual calibration critique created by James C. Cox, Vjollca Sadiraj, Bodo Vogt and Utteeyo Dasgupta

By:

Cox, James C [author]

Contributor(s):

Material type: Text

TextSeries: Economy theory ; Volume 54, number 2Berlin: Springer, 2013Content type:

text

Media type:

unmediated

Carrier type:

volume

Subject(s):

Dual calibration -- Reference dependence -- Risk aversion

LOC classification:

HB119 ECO

Online resources:

Click here to access online

Abstract: Can any prominent theory of decision under risk rationalize both small-stakes risk aversion and large-stakes risk aversion? Do some prominent theories fail to rationalize patterns of same-stakes risk aversion? How do reference payoffs enter in the answer to these questions? What would be the characteristics of a theory of decision under risk that would be immune to calibration critique? We offer a theoretical duality analysis that addresses these questions. We report dual propositions and corollaries that calibrate the implications of nonlinear transformation of probabilities or payoffs (or both). We also report several experiments that provide data on the empirical relevance of the two types of calibration patterns.

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Holdings
Item type	Current library	Call number	Vol info	Copy number	Status	Notes	Date due	Barcode
Journal Article	Main Library Journal Article	HB119 ECO (Browse shelf(Opens below))	vol. 54, no. 2 (pages 305-334)	SP21039	Not for loan	For In house Use
Journal Article	Main Library Journal Article	HB119 ECO (Browse shelf(Opens below))	Vol. 54, no.2 (pages 305-334)	SP21287	Not for loan	For In house Use

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Previous	HB119 ECO Incomplete information in rent-seeking contests	HB119 ECO A competitive equilibrium for a warm-glow economy	HB119 ECO A unifying impossibility theorem	HB119 ECO Is there a plausible theory for decision under risk? a dual calibration critique	HB139.T52 ECO Inconsistent VAR regression with common explosive roots	HB139.T52 ECO Testing homogeneity in panel data models with interactive fixed effects	HB139.T52 ECO A smooth nonparametric conditional density test for categorical responses	Next

Can any prominent theory of decision under risk rationalize both small-stakes risk aversion and large-stakes risk aversion? Do some prominent theories fail to rationalize patterns of same-stakes risk aversion? How do reference payoffs enter in the answer to these questions? What would be the characteristics of a theory of decision under risk that would be immune to calibration critique? We offer a theoretical duality analysis that addresses these questions. We report dual propositions and corollaries that calibrate the implications of nonlinear transformation of probabilities or payoffs (or both). We also report several experiments that provide data on the empirical relevance of the two types of calibration patterns.

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