Measuring Decision Weights of Ambiguous Events by Adapting De Finetti’s Betting-odds Method to Prospect Theory

Abstract

This paper extends de Finetti’s betting-odds method for assessing subjective probabilities to ambiguous events, i.e. events for which beliefs of decision makers cannot be quantified through subjective probabilities. De Finetti’s method is so transparent that decision makers can evaluate the relevant tradeoffs even in relatively complex situations, for… (More)

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