Why read Prospect Theory?

Book cover of Prospect Theory: For Risk and Ambiguity

Book description

Prospect Theory: For Risk and Ambiguity, provides a comprehensive and accessible textbook treatment of the way decisions are made both when we have the statistical probabilities associated with uncertain future events (risk) and when we lack them (ambiguity). The book presents models, primarily prospect theory, that are both tractable and…

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Why read it?

1 author picked Prospect Theory as one of their favorite books. Why do they recommend it?

Enrico G. De Giorgi

Author

This book is certainly the most technical among my favorites. However, I cannot resist listing it here because I really love it. Honestly, I highly esteem Peter Wakker, and I learned tremendously much from his scientific papers. Therefore, I read this book with high expectations, and these were fully fulfilled.

I learned from this book what prospect theory is and how it developed. I learned Prof. Wakker’s view on decision theory, and this strongly shaped my personal understanding of many decision-theoretical problems.

From Enrico's list on The best books to dive into the next generation of behavioral finance.