Abstract
The central idea of Disappointment theory is that an individual forms an expectation about a risky alternative, and may experience disappointment if the outcome eventually obtained falls short of the expectation. We abandon the hypothesis of a well-defined prior expectation: disappointment feelings may arise from comparing the outcome received with anyof the gamble’s outcomes that the individual failed to get. This leads to a new, general form of Disappointment model. It encompasses Rank Dependent Utility with an explicit one-parameter probability transformation, and Risk-Value models with a generic risk measure including Variance, providing a unifying behavioral foundation for these models.
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JEL Classification D80 . D81
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Delquié, P., Cillo, A. Disappointment without prior expectation: a unifying perspective on decision under risk. J Risk Uncertainty 33, 197–215 (2006). https://doi.org/10.1007/s11166-006-0499-4
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DOI: https://doi.org/10.1007/s11166-006-0499-4