“Luce problem” and discontinuity of Prelec’s function at p = 1

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.”

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Year of publication:	2015-04-15
Authors:	Harin, Alexander
Institutions:	Volkswirtschaftliche Fakultät, Ludwig-Maximilians-Universität München
Subject:	Luce \| Prelec \| utility \| prospect theory \| probability weighting function

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Extent:	application/pdf
Series:	MPRA Paper.
Type of publication:	Book / Working Paper
Classification:	C1 - Econometric and Statistical Methods: General ; C9 - Design of Experiments ; D8 - Information and Uncertainty ; D81 - Criteria for Decision-Making under Risk and Uncertainty
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011259321