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A comparison of regret theory and salience theory for decisions under risk

Title data

Herweg, Fabian ; Müller, Daniel:
A comparison of regret theory and salience theory for decisions under risk.
In: Journal of Economic Theory. Vol. 193 (April 2021) . - Art.Nr. 105226.
ISSN 0022-0531
DOI: https://doi.org/10.1016/j.jet.2021.105226

Abstract in another language

Two non-transitive theories to model decision making under risk are regret theory (Loomes and Sugden, 1982, Loomes and Sugden, 1987) and salience theory (Bordalo et al., 2012). While the psychological underpinning of these two approaches is different, the models share the assumption that within-state comparisons of outcomes across choice options are a key determinant of choice behavior. We investigate the overlap between these theories and show that original regret theory (Loomes and Sugden, 1982) is a special case of salience theory (Bordalo et al., 2012), which itself is a special case of generalized regret theory (Loomes and Sugden, 1987).

Further data

Item Type: Article in a journal
Refereed: Yes
Keywords: Choice under risk; Regret theory; Salience theory
Subject classification: JEL classification D81 D91
Institutions of the University: Faculties > Faculty of Law, Business and Economics > Department of Economics > Chair Economics VIII: International Competition Policy > Chair Economics VIII: International Competition Policy - Univ.-Prof. Dr. Fabian Herweg
Result of work at the UBT: Yes
DDC Subjects: 300 Social sciences
300 Social sciences > 330 Economics
Date Deposited: 10 Mar 2021 08:24
Last Modified: 10 Mar 2021 08:24
URI: https://eref.uni-bayreuth.de/id/eprint/63829