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On skew preference or non-skew preference of a CPT DM revealed in lottery choices with three payoffs

  • David Peel
  • , Jie Zhang*
  • *Corresponding author for this work
  • Lancaster University

Research output: Contribution to journalArticlepeer-review

Abstract

In this letter we illustrate that the representative Cumulative Prospect Decision Maker when choosing between lotteries with three payoffs that exhibit the same probabilities of payoffs and expected return and variance can exhibit either skew preference or non-skew preference and consequently explain the conflicting experimental result reported in the literature.

Original languageEnglish
Article number111549
JournalEconomics Letters
Volume235
DOIs
Publication statusPublished - Feb 2024

Keywords

  • Cumulative prospect theory
  • Kurtosis
  • Lotteries
  • Skewness

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