WP 2010-10 Is There a Plausible Theory for Decision under Risk? A Dual Calibration Critique

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Published in 2013 in Economic Theory, Volume 54, Issue 2.

ABSTRACT. Some theories of decision under risk have been critiqued with varying-payoffs calibration arguments. Such concavity calibration has no implication either for nonlinear probability transformation or for theories with variable reference points. We introduce varying-probabilities calibration that applies to both. The… more »