2019/01/15 by Misha Perepelitsa, Perepelitsa, Misha
Chemistry · Economics, Econometrics and Finance · #Chemistry and Stereochemistry Studies #FOS: Economics and business #Theoretical Economics (econ.TH) #econ.TH
paper · pdf · doi:10.48550/arxiv.1901.04995
14 pages, 2 figures
openalex publication_date 2019/01/15 · arxiv created 2019/02/15 · arxiv updated 2019/02/18 · openalex created_date 2024/04/11 · openalex updated_date 2026/07/28
We consider a model for decision making based on an adaptive, k-period, learning process where the priors are selected according to Von Neumann-Morgenstern expected utility principle. A preference relation between two prospects is introduced, defined by the condition which prospect is selected more often. We show that the new preferences have similarities with the preferences obtained by Kahneman and Tversky (1979) in the context of the prospect theory. Additionally, we establish that in the limit of large learning period, the new preferences coincide with the expected utility principle.