A simple model of cumulative prospect theory

Schmidt, Ulrich; Zank, Horst

doi:10.1016/j.jmateco.2008.12.001

Cited by 13 publications

(5 citation statements)

References 66 publications

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“…What psychological mechanism is able to provide an individual with a potentially correct answer to a complex, dynamical problem in a short time frame? Psychological theories of decision making describe the decider as an agent who frames the situation according to a reference point, then he or she analyses separately each option by evaluating the possible evolution of events, and finally optimizes the decision by selecting the most rewarding option (Kahneman & Tversky, 1979;Schmidt & Zank, 2009). It is clear that professional players do not have the luxury of analysing all potential courses of action and select the most appropriate option.…”

Section: Discussionmentioning

confidence: 99%

Team Play in Football: How Science Supports F. C. Barcelona’s Training Strategy

Chassy

2013

PSYCH

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The paper applies the theory of self-organising systems to sport. The central hypothesis is that team play, implemented as passing in football, is the central factor generating performance. Data from the 2013 European Champions League were used to show that passing speed and precision predict domination (possession), shooting opportunities and performance. By using principal component analysis, the article offers a formula to estimate the team play of any team considering its passing speed, passing precision and ability to score. The compound measure accounts for about 42% of the variance in performance. The impact of this research on the training of football players is discussed.

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Section: Discussionmentioning

confidence: 99%

Team Play in Football: How Science Supports F. C. Barcelona’s Training Strategy

Chassy

2013

PSYCH

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“…P Yaari's (1987) dual theory. Moreover, if lotteries are cosigned (i.e., the outcomes in a given state are all gains or all losses) PAC is also weakly incentive compatible under linear CPT (Schmidt and Zank 2009) since in this case the independence condition of that model has the same implications as the dual independence axiom.…”

Section: Incentive Compatibilitymentioning

confidence: 99%

Paradoxes and mechanisms for choice under risk

2014

Self Cite

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Experiments on choice under risk typically involve multiple decisions by individual subjects. The choice of mechanism for selecting decision(s) for payoff is an essential design feature unless subjects isolate each one of the multiple decisions. We report treatments with different payoff mechanisms but the same decision tasks. The data show large differences across mechanisms in subjects' revealed risk preferences, a clear violation of isolation. We illustrate the importance of these mechanism effects by identifying their implications for classical tests of theories of decision under risk. We discuss theoretical properties of commonly used mechanisms, and new mechanisms introduced herein, in order to clarify which mechanisms are theoretically incentive compatible for which theories. We identify behavioral properties of some mechanisms that can introduce bias in elicited risk preferences-from cross-task contaminationeven when the mechanism used is theoretically incentive compatible. We explain that selection of a payoff mechanism is an important component of experimental design in many topic areas including social preferences, public goods, bargaining, and choice under uncertainty and ambiguity as well as experiments on decisions under risk.

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“…Keeping into consideration the impact of behavioral factors on investment decision-making, a new school of thought ("Behavioral Finance Theory or BFT") has emerged and evolved with the proposal of the prospect theory (PT) by Tversky and Kahneman (1979). In the subsequent years, the extant literature has been contributed by the cumulative prospect theory, aka CPT (Tversky and Kahneman, 1992), modified CPT with uncertain information (Schmidt et al, 2008;Schmidt and Zank, 2009). All these theories entail the impact of abnormal phenomena on investment decisions.…”

Section: Introductionmentioning

confidence: 99%

A Multi-Criteria Based Stock Selection Framework in Emerging Market

Biswas

Bandyopadhyay

Pamučar

et al. 2022

Oper. Res. Eng. Sci. Theor. Appl.

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The present study aims to compare the stock performances of the Fast Moving Consumer Goods (FMCG) and Consumer Durables (CD) firms at the Bombay Stock Exchange (BSE), India. It is evident from the extant literature that investment in the stock market depends on two broad objectives such as maximization of return while minimization of risk. Besides, investment decisions are also influenced by the behavioral nature of the investors. To this end, the current work considers the earning prospect (average market return, return on net worth, earning per share, and yield), marketcentric risk (beta), market perception (price to book value, shares traded), momentum (turnover) and benchmarked performance (alpha) to set the criteria for comparison. The study period considers seven consecutive financial years to discern the performance. For the comparative analysis, a combined multi-criteria decision-making (MCDM) framework of Logarithmic Percentage Change-driven Objective Weighting (LOPCOW) (used to determine criteria weights) and Evaluation Based on Distance fromAverage Solution (EDAS) (for ranking) methods has been utilized. Borda Count Method (BC), Copeland Method, and Simple Additive Weighting (SAW) have been used to aggregate the year-wise rankings. The calculated weights show consistency to the modern portfolio theory as average return, beta, and return on net worth obtain higher weightage than others. It is observed that there are variations in the year-wise comparative ranking, while on aggregation, FMCG firms dominate the top positions. The analysis reveals that Avanti Feeds Ltd.

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A simple model of cumulative prospect theory

Cited by 13 publications

References 66 publications

Team Play in Football: How Science Supports F. C. Barcelona’s Training Strategy

Team Play in Football: How Science Supports F. C. Barcelona’s Training Strategy

Paradoxes and mechanisms for choice under risk

A Multi-Criteria Based Stock Selection Framework in Emerging Market

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