Composite Prospect Theory: A proposal to combine ‘prospect theory’ and ‘cumulative prospect theory’

Evidence shows that (i) people overweight low probabilities and underweight high probabilities, but (ii) ignore events of extremely low probability and treat extremely high probability events as certain. The main alternative decision theories, rank dependent utility (RDU) and cumulative prospect theory (CP) incorporate (i) but not (ii). By contrast, prospect theory (PT) addresses (i) and (ii) by proposing an editing phase that eliminates extremely low probability events, followed by a decision phase that only makes a choice from among the remaining alternatives. However, PT allows for the choice of stochastically dominated options, even when such dominance is obvious. We propose to combine PT and CP into composite cumulative prospect theory (CCP). CCP combines the editing and decision phases of PT into one phase and does not allow for the choice of stochastically dominated options. This, we believe, provides the best available alternative among decision theories of risk at the moment. As illustrative examples, we also show that CCP allows us to resolve three paradoxes: the insurance paradox, the Becker paradox and the St. Petersburg paradox.Decision making under risk; Composite Prelec probability weighting functions; Composite cumulative prospect theory; Composite rank dependent utility theory; Insurance; St. Petersburg paradox; Becker.s paradox

Prospect relativity: How choice options influence decision under risk

In many theories of decision under risk (e.g., expected utility theory, rank-dependent utility theory, and prospect theory), the utility of a prospect is independent of other options in the choice set. The experiments presented here show a large effect of the available options, suggesting instead that prospects are valued relative to one another. The judged certainty equivalent for a prospect is strongly influenced by the options available. Similarly, the selection of a preferred prospect is strongly influenced by the prospects available, Alternative theories of decision under risk (e.g., the stochastic difference model, multialternative decision field theory, and range frequency theory), where prospects are valued relative to one another, can provide an account of these context effects

Accessing and assessing lunar resources with PROSPECT

PROSPECT is a package in development by ESA to assess the in-situ resource potential of lunar regolith. PROSPECT will: obtain sub-surface regolith samples, extract volatiles, identify chemical species, quantify abundances, and characterize isotopes

Prospect for antiferromagnetic spintronics

Exploiting both spin and charge of the electron in electronic micordevices has lead to a tremendous progress in both basic condensed-matter research and microelectronic applications, resulting in the modern field of spintronics. Current spintronics relies primarily on ferromagnets while antiferromagnets have traditionally played only a supporting role. Recently, antiferromagnets have been revisited as potential candidates for the key active elements in spintronic devices. In this paper we review approaches that have been employed for reading, writing, and storing information in antiferromagnets

“‘What on Earth Was I Thinking?’ How Anticipating Plan’s End Places an Intention in Time”

How must you think about time when you form an intention? Obviously, you must think about the time of action. Must you frame the action in any broader prospect or retrospect? In this essay I argue that you must: you thereby commit yourself to a specific prospect of a future retrospect – a retrospect, indeed, on that very prospect. In forming an intention you project a future from which you will not ask regretfully, referring back to your follow-through on that intention, “What on earth was I thinking?” I argue that this broader attitude expresses the self-accountability necessary for practical commitment

The Current State and the Prospects of Innovative Development of Export-Organized Ukrainian Industrial Enterprises

The purpose of the article is to study the current state and the prospects of innovative development of export-oriented industrial enterprises of Lviv region and of Ukraine on the basis of modern theory and practice in the field of economics and enterprise management. It is established that the innovative activity of Ukrainian industrial enterprises is at a rather low level with the prospect of further reduction. The key obstacles and difficulties arising on the way of innovative development of Ukrainian export-oriented industrial enterprises are highlighted. The ways of solving the problems of innovative development of export-oriented industrial enterprises in Ukraine are offered. The prospect of further research in this area is the study of key aspects of the development of export-oriented industrial enterprises with the prospect of development and increases their export potential.The purpose of the article is to study the current state and the prospects of innovative development of export-oriented industrial enterprises of Lviv region and of Ukraine on the basis of modern theory and practice in the field of economics and enterprise management. It is established that the innovative activity of Ukrainian industrial enterprises is at a rather low level with the prospect of further reduction. The key obstacles and difficulties arising on the way of innovative development of Ukrainian export-oriented industrial enterprises are highlighted. The ways of solving the problems of innovative development of export-oriented industrial enterprises in Ukraine are offered. The prospect of further research in this area is the study of key aspects of the development of export-oriented industrial enterprises with the prospect of development and increases their export potential

Resolving inconsistencies in utility measurement under risk: Tests of generalizations of expected utility

This paper explores biases in the elicitation of utilities under risk and the contribution that generalizations of expected utility can make to the resolution of these biases. We used five methods to measure utilities under risk and found clear violations of expected utility. Of the theories studies, prospect theory was most consistent with our data. The main improvement of prospect theory over expected utility was in comparisons between a riskless and a risky prospect(riskless-risk methods). We observed no improvement over expected utility in comparisons between two risky prospects (risk-risk methods). An explanation why we found no improvement of prospect theory over expected utility in risk-risk methods may be that there was less overweighting of small probabilities in our study than has commonly been observed.Utility Measurement, Nonexpected Utility, Prospect Theory, Health., Leex

Community empowerment and scaling-up in urban areas

"CARE began PROSPECT (Program of Support for Poverty Elimination and Community Transformation) in 1998. PROSPECT aims to reduce poverty in peri-urban areas of Lusaka. It employs a community-based approach to carry out three types of activities: social empowerment (institution building at the local level), personal empowerment (microfinance), and infrastructure improvement (mostly water supply schemes). PROSPECT has attempted to carry out these activities largely through its support of area-based organizations (ABOs) that now form part of city government. The zone development committees (ZDCs) and residents' development committees (RDCs) are the basic components of the ABO structure. These are community-level representations of municipal government; they are the community's mechanisms for expressing its voice and driving development. PROSPECT is itself an extension of an earlier project, PUSH II (Peri-Urban Self-Help Project). PUSH II and PROSPECT are fundamentally about developing community-based and community-driven development (CDD) mechanisms and strengthening community capacities to identify and respond to community needs. The paper examines the scaling-up experience of PUSH II and PROSPECT, looking especially at the mechanisms of CDD, the ABOs." Authors' AbstractCARE ,Poverty alleviation ,Community organizations ,Urban poor ,Peri-urban areas ,

Prospect of the Zee model

The Zee model is one of promising models of neutrino mass generation mechanism. However, the original Zee model is not on the framework of the ground unification scenario, and moreover, it is recently pointed out that the predicted value of $\sin^2 2\theta_{solar}$ must be satisfied the relation $\sin^2 2\theta_{solar} > 0.99$. We discuss whether possible GUT versions of the Zee model can be free from the severe constraint $\sin^2 2\theta_{solar} >0.99$ or not. We will conclude that the following two models are promising: an R-parity violating SUSY GUT model and an SO(10) model with a 126-plet scalar.Comment: 3 pages, no figure, Latex, presented at KEKTC5(Nov. 2001), to be publised in the proceeding