A criticism of Bernheim & Sprenger's (2020) tests of rank dependence

Research output: Contribution to journalArticleAcademicpeer-review

1 Citation (Scopus)

Abstract

Bernheim and Sprenger (2020, Econometrica; SB) claimed to experimentally falsify rank dependence in prospect theory. This paper criticizes SB's results and novelty claims. Their experiments only captured well-known heuristics and not genuine preferences. Many falsifications of rank dependence have been made before, and SB's equalizing reductions have also been used before. SB thought to identify probability weighting and utility where they are unidentifiable, invalidating all SB's related claims. SB used an incorrect formula of original prospect theory. Their suggested alternative of rank-independent probability weighting with dependence on the number of outcomes (their “complexity aversion;” a misnomer) has long been discarded.

Original languageEnglish
Article number101950
JournalJournal of Behavioral and Experimental Economics
Volume107
DOIs
Publication statusPublished - Dec 2023

Bibliographical note

Publisher Copyright:
© 2023 The Author(s)

Fingerprint

Dive into the research topics of 'A criticism of Bernheim & Sprenger's (2020) tests of rank dependence'. Together they form a unique fingerprint.

Cite this