Noisy Parameters in Risky Choice

  title={Noisy Parameters in Risky Choice},
  author={Sudeep Bhatia and Graham Loomes},
We examine the effect of variability in model parameters on the predictions of expected utility theory and cumulative prospect theory, two of the most influential choice models in decision making research. We find that zero-mean and symmetrically distributed noise in the underlying parameters of these models can systematically distort choice probabilities… CONTINUE READING