Article ID: | iaor2000298 |
Country: | United States |
Volume: | 44 |
Issue: | 7 |
Start Page Number: | 879 |
End Page Number: | 895 |
Publication Date: | Jul 1998 |
Journal: | Management Science |
Authors: | Tversky Amos, Fox Craig R. |
Keywords: | decision theory, risk, decision: studies |
We develop a belief-based account of decision under uncertainty. This model predicts decisions under uncertainty from (i) judgments of probability, which are assumed to satisfy support theory; and (ii) decisions under risk, which are assumed to satisfy prospect theory. In two experiments, subjects evaluated uncertain prospects and assessed the probability of the respective events. Study 1 involved the 1995 professional basketball playoffs; Study 2 involved the movement of economic indicators in a simulated economy. The results of both studies are consistent with the belief-based account, but violate the partition inequality implied by the classical theory of decision under uncertainty.