Choices, Values, and Frames

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Daniel Kahneman, Amos Tversky
Cambridge University Press, Sep 25, 2000 - Business & Economics - 840 pages
5 Reviews
This book presents the definitive exposition of 'prospect theory', a compelling alternative to the classical utility theory of choice. Building on the 1982 volume, Judgement Under Uncertainty, this book brings together seminal papers on prospect theory from economists, decision theorists, and psychologists, including the work of the late Amos Tversky, whose contributions are collected here for the first time. While remaining within a rational choice framework, prospect theory delivers more accurate, empirically verified predictions in key test cases, as well as helping to explain many complex, real-world puzzles. In this volume, it is brought to bear on phenomena as diverse as the principles of legal compensation, the equity premium puzzle in financial markets, and the number of hours that New York cab drivers choose to drive on rainy days. Theoretically elegant and empirically robust, this volume shows how prospect theory has matured into a new science of decision making.
  

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This is an excellent, organized compilation of the most influential papers written by the most influential experts in a diverse set of subfields within behavioral economics.

Contents

Choices Values and Frames
1
Prospect Theory An Analysis of Decision under Risk
17
Advances in Prospect Theory Cumulative Representation of Uncertainty
44
Compound Invariant Weighting Functions in Prospect Theory
67
Weighing Risk and Uncertainty
93
A BeliefBased Account of Decision under Uncertainty
118
Loss Aversion in Riskless Choice A ReferenceDependent Model
143
Anomalies The Endowment Effect Loss Aversion and Status Quo Bias
159
Judicial Choice and Disparities between Measures of Economic Values
424
Contrasting Rational and Psychological Analyses of Political Choice
451
Conflict Resolution A Cognitive Perspective
473
The Construction of Preference
489
Contingent Weighting in Judgment and Choice
503
ContextDependent Preferences
518
Ambiguity Aversion and Comparative Ignorance
528
Attribute Evaluability Its Implications for JointSeparate Evaluation Reversals and Beyond
543

The Endowment Effect and Evidence of Nonreversible Indifference Curves
171
A Test of the Theory of ReferenceDependent Preferences
180
Diminishing Marginal Utility of Wealth Cannot Explain Risk Aversion
202
Rational Choice and the Framing of Decisions
209
Framing Probability Distortions and Insurance Decisions
224
Mental Accounting Matters
241
Toward a Positive Theory of Consumer Choice
269
Prospect Theory in the Wild Evidence from the Field
288
Myopic Loss Aversion and the Equity Premium Puzzle
301
Fairness as a Constraint on Profit Seeking Entitlements in the Market
317
Money Illusion
335
Labor Supply of New York City Cab Drivers One Day at a Time
356
Are Investors Reluctant to Realize Their Losses?
371
Timid Choices and Bold Forecasts A Cognitive Perspective on Risk Taking
393
Overconfidence and Excess Entry An Experimental Approach
414
Preferences for Sequences of Outcomes
565
Anomalies in Intertemporal Choice Evidence and an Interpretation
578
ReasonBased Choice
597
Value Elicitation Is There Anything in There?
620
Economic Preferences or Attitude Expressions? An Analysis of Dollar Responses to Public Issues
642
Experienced Utility and Objective Happiness A MomentBased Approach
673
Evaluation by Moments Past and Future
693
Endowments and Contrast in Judgments of WellBeing
709
A Bias in the Prediction of Tastes
726
The Effect of Purchase Quantity and Timing on VarietySeeking Behavior
735
New Challenges to the Rationality Assumption
758
References
775
Author Index
821
Subject Index
832
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About the author (2000)

Daniel Kahneman received the 2002 Nobel Prize in Economic Sciences for his pioneering work with Amos Tversky on decision-making.

Tversky is Professor of Psychology, Stanford University.

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