Citation

Lopes LL, Oden GC. J. Math. Psychol. 1999; 43(2): 286-313.

Affiliation

University of Iowa

Copyright

(Copyright © 1999, Elsevier Publishing)

DOI

10.1006/jmps.1999.1259

PMID

10366519

Abstract

In recent years, descriptive models of risky choice have incorporated features that reflect the importance of particular outcome values in choice. Cumulative prospect theory (CPT) does this by inserting a reference point in the utility function. SP/A (security-potential/aspiration) theory uses aspiration level as a second criterion in the choice process. Experiment 1 compares the ability of the CPT and SP/A models to account for the same within-subjects data set and finds in favor of SP/A. Experiment 2 replicates the main finding of Experiment 1 in a between-subjects design. The final discussion brackets the SP/A result by showing the impact on fit of both decreasing and increasing the number of free parameters. We also suggest how the SP/A approach might be useful in modeling investment decision making in a descriptively more valid way and conclude with comments on the relation between descriptive and normative theories of risky choice. Copyright 1999 Academic Press.

Language: en