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Probability Weighting and the Persistence of Disagreement among Constituents

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  • Dacey Raymond

    (University of Idaho)

Abstract

This paper is a technical note that reports an interesting risk-related result relevant to the analysis of disagreements among constituents. The problem of interest here is the clash that often arises within a political constituency regarding the decision to act or not act in response to a problematic situation. The analysis presented here shows that the probability weighting function of prospect theory plays a fundamental role in the persistence of disagreements among constituents that involve policy decisions with large potential losses of low likelihood.

Suggested Citation

  • Dacey Raymond, 2001. "Probability Weighting and the Persistence of Disagreement among Constituents," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 8(1), pages 1-18, September.
    • Handle: RePEc:bpj:pepspp:v:8:y:2001:i:1:n:2
    DOI: 10.2202/1554-8597.1051
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    References listed on IDEAS

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    1. Tversky, Amos & Kahneman, Daniel, 1992. "Advances in Prospect Theory: Cumulative Representation of Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 297-323, October.
    2. Drazen Prelec, 1998. "The Probability Weighting Function," Econometrica, Econometric Society, vol. 66(3), pages 497-528, May.
    3. Craig R. Fox & Amos Tversky, 1998. "A Belief-Based Account of Decision Under Uncertainty," Management Science, INFORMS, vol. 44(7), pages 879-895, July.
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