Shanghai Second Polytechnic University
Shanghai, China

Department of Mathematics
Illinois State University
Normal, Illinois

Terry College of Business
University of Georgia
Athens, Georgia


Thinking on the Three Generations of Prospect Theory


In this article, we review and make some comments on the research of behavioral finance based on three generations of prospect theory by China’s scholars. We discuss their contributions from six aspects including the difference of the values of parameters of value function and weight function; the difference between individual’s decision behavior and group’s decision behavior; the explanation of insurance behavior from perspective of prospect theory; and other important factors.

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