Abstract
Until the end of the 1970s, the behavior of bounded rationality was believed to be chaotic and unsuited to modeling (Wakker, 2010). Until then, normative expected utility theory was seen to be the best describer of behavior (Friedman & Savage, 1948; Arrow, 1971). “Kahneman & Tversky’s (1979) prospect theory provided a major breakaway. It was the first descriptive theory that explicitly incorporated irrational behavior in an empirically realistic manner (Kahneman, 2003, p. 1456), while at the same time being systematic and tractable” (Wakker, 2010, p. 2).
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© 2013 Springer Fachmedien Wiesbaden
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Stommel, E. (2013). Theoretical basis. In: Reference-Dependent Preferences. Springer Gabler, Wiesbaden. https://doi.org/10.1007/978-3-658-00635-8_2
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DOI: https://doi.org/10.1007/978-3-658-00635-8_2
Publisher Name: Springer Gabler, Wiesbaden
Print ISBN: 978-3-658-00634-1
Online ISBN: 978-3-658-00635-8
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