Eliciting Decision Weights by Adapting de Finetti's Betting-Odds Method to Prospect Theory

E. Diecidue, P.P. Wakker*, M. Zeelenberg

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review


This paper extends de finetti’s betting-odds method for assessing subjective beliefs to ambiguous events. Thus, a tractable manner for measuring decision weights under ambiguity is obtained. De finetti’s method is so transparent that decision makers can evaluate the relevant tradeoffs in complex situations. The resulting data can easily be analyzed, using nonparametric techniques. Our extension is implemented in an experiment on predicting next-day’s performance of the dow jones and nikkei stock indexes, where we test the existence and nature of rank dependence, finding usual patterns. We also find violations of rank dependence.
Original languageEnglish
Pages (from-to)179-199
Number of pages21
JournalJournal of Risk and Uncertainty
Publication statusPublished - 1 Jan 2007

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