Talk:Prospect theory

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This article is within the scope of the Economics WikiProject, an effort to create, expand, organize, and improve economics-related articles..
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Is there a reason this article has been removed? Dieter Simon 23:30 12 Jun 2003 (UTC)

I've removed this dead link

we need something good to replace it TitaniumDreads 14:15, 9 Jun 2005 (UTC)

Contents

[edit] criticisms of prospect theory

The status quo criticisms of prospect theory from economists are much less interesting than those leveled by people like Gerd Gigerenzer. I'm definitely a neophyte with this, but would be curious to know wether or not he's a lone wolf in this regard. The little I've read by him seems fairly sophisticated and on the mark.

I'm unfamiliar with his work, but feel free to add what you know. I hope he's not attacking straw men, though, Tversky and co. don't say that biases are necessarily sub-optimal, they just identify that decisions aren't made in the way a rational caluclating machine (homo economicus) would. Psychobabble 01:58, 20 October 2005 (UTC)
Don't worry, he's more like a lone wolf (but with a big working group) who tries to prove that only simple models can explain the world ('fast and frugal'). Economists don't notice him much.

[edit] Picture

Can whoever made the picture fix that line so that it is smooth? I know it's a small matter, but it's just not aesthetically pleasing. thank you! 70.111.248.60 02:26, 19 April 2006 (UTC)

 If the following description in the article is correct: 
 "...people decide which outcomes they see as basically identical and they set a reference point
 and consider lower outcomes as losses and larger as gains." 
 then shouldn't the "Reference Point" actually be called the Reference LEVEL, and applied to the
 horizontal line (which also denotes, by coincidence, the horizontal axis of the graph) ?
 LookingGlass (talk) 21:30, 13 February 2008 (UTC)

[edit] Another good source

It's been suggested this source is a better introduction to the subject. http://www.econport.org/econport/request?page=man_ru_advanced_prospect Mathiastck 23:39, 14 August 2006 (UTC)

  • Looks like a nice introduction to this topic. However, it mentions a couple of effects that are not that closely related to Prospect Theory and omits some points. Something in this style would also be too lengthy for a wikipedia entry, I think. Nevertheless, I will add a link to this page, since it is a very useful resource by itself! Rieger 18:11, 15 August 2006 (UTC)
 Could you detail your points please Rieger?  I've read the article referred to and it seems very
 clearly and succinclty set out to me.  It seems a lot simpler too IMHO and on a quite 
 technical topic.
 LookingGlass (talk) 22:14, 13 February 2008 (UTC)

[edit] Can anyone make this article understandable?

I am totally lost basically at every word. I dont understand at all what it is even about. Is there some real life implications? It was about society after all (right?). Considering that it is supposed to be quite important I guess it would be nice if even non-scientists could get a introduction. Or perhaps a real world example could help? --Thomas 02:57, 13 February 2007 (UTC)

Well, I could give it a try, e.g. by adding some more fluff at the beginning, but please promise to give some further input, once I am donw with my improvements... Rieger 05:30, 19 February 2007 (UTC)
Done, hope it is a little better now... However, the article needs some more attention: There are many repetitions, complicated wording, it's fuzzy towards the end, many interesting things are missing, the references are assorted etc. Would be nice at least to explain the four-fold pattern of risk-attitudes, for instance! If I just had more time! Maybe somebody can help? :( Rieger 05:53, 19 February 2007 (UTC)
Added a little bit more. Maybe somebody can improve my bad writing a little? If I had more time, I would also add a table for the four-fold pattern of risk-attitudes... Rieger 20:45, 23 February 2007 (UTC)
"Real world Example" ? Poker. The Gnome 11:33, 2 June 2007 (UTC)

[edit] Prospect Theory examples

Anyone think some examples might be warranted? I recently came across an interesting idea that Louis the XIV's actions in regards to his many wars (War of Devolution, Franco-Dutch War, Nine Years War, and War of the Spanish Succession) are a prime example of prospect theory. Anyone think that would be a worthwhile addition to the article? I can provide proper references, as well. - The Fwanksta 17:20, 19 September 2007 (UTC)

I don't find the explanation of prospect theory to be at all clear. Too much focus on "implications" and not enough explation of the theory. More examples would help. —Preceding unsigned comment added by 132.178.133.65 (talk) 21:45, 25 September 2007 (UTC)

[edit] Merge proposal

Cumulative prospect theory should be merged into this article. It can't fill its own article, and is defined mainly through its differences with Prospect theory. There is no reason for it to have its own page. --76.217.95.43 (talk) 02:54, 24 February 2008 (UTC)

I agree. The work is done by similar researchers, and one is a refinement of the earlier idea. It seems like merging would be a good idea. Edchi (talk) 02:30, 28 February 2008 (UTC)

[edit] NPOV

This article is cluttered and disorganized, but worse is that in its meandering way it touts how PT will solve every intellectual mystery ever. We need to put more criticism and focus more on what prospect theory is, rather than advertise for it. By the way I do believe that PT is an excellent model and should be taught in undergraduate economics classes as a more realistic alternative to Von Neumann-Morgenstern expected utility in situations where the model calls for this level of specificity. Crasshopper (talk) 06:29, 23 March 2008 (UTC)