@inproceedings{8fffcf577e3c4449b0c8532717da054a,
title = "How Does Prospect Theory Reflect Heuristics' Probability Sensitivity in Risky Choice?",
abstract = "Two prominent approaches to describing how people make decisions between risky options are algebraic models and heuristics. The two approaches are based on fundamentally different algorithms and are thus usually treated as antithetical, suggesting that they may be incommensurable. Using cumulative prospect theory (CPT; Tversky & Kahneman, 1992) as an illustrative case of an algebraic model, we demonstrate how algebraic models and heuristics can mutually inform each other. Specifically, we highlight that CPT describes decisions in terms of psychophysical characteristics, such as diminishing sensitivity to probabilities, and we show that this holds even when the underlying process is heuristic in nature. Our results suggest that algebraic models and heuristics might offer complementary rather than rival modeling frameworks and highlight the potential role of heuristic principles in information processing for prominent descriptive constructs in risky choice.",
keywords = "computational modeling, cumulative prospect theory, heuristics, probability sensitivity, risky choice",
author = "Suter, {Renata S.} and Thorsten Pachur and Ralph Hertwig",
note = "Publisher Copyright: {\textcopyright} CogSci 2013.All rights reserved.; 35th Annual Meeting of the Cognitive Science Society - Cooperative Minds: Social Interaction and Group Dynamics, CogSci 2013 ; Conference date: 31-07-2013 Through 03-08-2013",
year = "2013",
language = "English",
series = "Cooperative Minds: Social Interaction and Group Dynamics - Proceedings of the 35th Annual Meeting of the Cognitive Science Society, CogSci 2013",
publisher = "The Cognitive Science Society",
pages = "1408--1413",
editor = "Markus Knauff and Natalie Sebanz and Michael Pauen and Ipke Wachsmuth",
booktitle = "Cooperative Minds",
}