JHRSS  Vol.7 No.1 , March 2019
A Review of Prospect Theory
Abstract: Behavioral decision derived from the paradox of the expected utility theory. With the introduction of cognitive psychology, it opened up a road for the field of behavioral decision. Now countless scholars are wandering in behavioral decision related with prospect theory, it is worth mentioning the prospect theory proposes Daniel Kahneman won the Nobel Prize in economics in 2002. It should be the recognition for his important contribution to the academic. This paper is a review of prospect theory.
Cite this paper: Pan, Z. (2019) A Review of Prospect Theory. Journal of Human Resource and Sustainability Studies, 7, 98-107. doi: 10.4236/jhrss.2019.71007.

[1]   Kahneman, D. and Tversky, A. (1979) Prospect Theory: An Analysis of Decision under Risk. Econometrica, 47, 263-292.

[2]   Quiggin, J. (1982) A Theory of Anticipated Utility. Journal of Economic Behavior & Organization, 3, 323-343.

[3]   Fox, C.R. (2000) Ambiguity Aversion and Comparative Ignorance. In: Kahneman, D. and Tversky, A., Eds., Choices, Values, and Frames, Cambridge University Press, Cambridge, 585-603.

[4]   Wu, G. and Gonzalez, R. (1998) Common Consequence Conditions in Decision Making under Risk. Journal of Risk and Uncertainty, 16, 115-139.

[5]   Humphrey, S.J. (1999) Probability Learning, Event-Splitting Effects and the Economic Theory of Choice. Theory and Decision, 46, 51-78.

[6]   Langer, T. and Weber, M. (2001) Prospect Theory, Mental Accounting, and Differences in Aggregated and Segregated Evaluation of Lottery Portfolios. Management Science, 47, 716-733.

[7]   Gonzalez, R. and Wu, G. (2003) Composition Rules in Original and Cumulative Prospect Theory. Working Paper, Department of Psychology, University of Michigan, Ann Arbor, MI.

[8]   Köszegi, B. and Rabin, M. (2005) A Model of Reference-Dependent Preferences. Quarterly Journal of Economics, 121, 1133-1165.

[9]   Fehr-Duda, H., Gennaro, M.D. and Schubert, R. (2006) Gender, Financial Risk, and Probability Weights. Theory and Decision, 60, 283-313.

[10]   Schmidt, U. and Zank, H. (2008) Risk Aversion in Cumulative Prospect Theory. Management Science, 54, 208-216.

[11]   Snowberg, E. and Wolfers, J. (2010) Explaining the Favorite-Long Shot Bias: Is It Risk-Love or Misperceptions? Journal of Political Economy, 118, 723-746.

[12]   Kahneman, A.T. (1992) Advances in Prospect Theory: Cumulative Representation of Uncertainty. Journal of Risk and Uncertainty, 5, 297-323.

[13]   Green, T.C. and Hwang, B.H (2012) Initial Public Offerings as Lotteries: Skewness Preference and First-Day Returns. Management Science, 58, 432-444.

[14]   Sydnor, J. (2010) (Over)Insuring Modest Risks. American Economic Journal Applied Economics, 2, 177-199.

[15]   Kőszegi, B. and Rabin, M. (2009) Reference-Dependent Consumption Plans. American Economic Review, 99, 909-936.

[16]   Heidhues, P. and Koszegi, B. (2014) Regular Prices and Sales. Theoretical Economics, 9, 217-251.

[17]   Crawford, V.P. and Meng, J. (2011) New York City Cab Drivers’ Labor Supply Revisited: Reference-Dependent Preferences with Rational-Expectations Targets for Hours and Income. American Economic Review, 101, 1912-1932.

[18]   Pasquariello, P. (2014) Prospect Theory and Market Quality. Journal of Economic Theory, 149, 276-310.