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A growing body of qualitative evidence shows that loss aversion, a phenomenon formalized in prospect theory, can explain a variety of field and experimental data. Quantifications of loss aversion are, however, hindered by the absence of a general preference-based method to elicit the utility for gains and losses simultaneously. This paper proposes such a(More)
This paper explores biases in the elicitation of utilities under risk and the contribution that generalizations of expected utility can make to the resolution of these biases. We used five methods to measure utilities under risk and found clear violations of expected utility. Of the theories studies, prospect theory was most consistent with our data. The(More)
T his paper introduces a method to measure regret theory, a popular theory of decision under uncertainty. Regret theory allows for violations of transitivity, and it may seem paradoxical to quantitatively measure an intransitive theory. We adopt the trade-off method and show that it is robust to violations of transitivity. Our method makes no assumptions(More)
Quality-adjusted life-years (QALYs) are the most common utility measure in medical decision analysis and economic evaluations of health care. This paper presents an axiomatization of QALYs under cumulative prospect theory (CPT), currently the most influential model for decision under uncertainty. Because the set of health states need not be endowed with a(More)
This paper introduces time-tradeoff (TTO) sequences as a new tool to analyze time inconsistency and intertemporal choice. TTO sequences simplify the measurement of discount functions, requiring no assumption about utility. They also simplify the qualitative testing of time inconsistencies, and allow for quantitative measurements thereof. TTO sequences can(More)
This paper tests the internal consistency of time trade-off utilities. We find significant violations of consistency in the direction predicted by loss aversion. The violations disappear for higher gauge durations. We show that loss aversion can also explain that for short gauge durations time trade-off utilities exceed standard gamble utilities. Our(More)
This paper explores whether there is one unifying concept of utility, as commonly assumed in applied and empirical economics, or whether utility is context-specific, as typically assumed in economic theory. We present a new method to measure the utility for gains, the utility for losses, and loss aversion both for risk and for time. Utility under risk was(More)