Applications of Prospect Theory to Political Science

Essay for Risk and Information 2018-2019

The essay title is:

Discuss and evaluate prospect theory as a theory of choice. Does the difficulty of applying the theory make it a poor theory of choice?

The essay is due on at 12.30 am.

The essay must be submitted electronically via a link that will be posted in the Assignments folder of MyDundee

It is strongly advised that you start the essay early so that you have time to read around and write the essay in good time

The essay must be amaximumof 2500 words long.

The following is a list of possible reading material:

Papers:

1) Kahneman D. & Tversky A. (1979) Prospect Theory: An Analysis of Decision under Risk Econometrica vol. 47 p. 263-297 (Available on MyDundee)

2) N. C. Barberis (2013) Thirty Years of Prospect Theory in Economics: A Review and Assessment Journal of Economic perspectives Vol, 27, No. 1, Pages 173196

3) R. M. Holmes, P. Bromiley, C. E. Devers, T. R. Holcomb & J. B. McGuire (2011)

Management Theory Applications of Prospect Theory: Accomplishments, Challenges,

and Opportunities Journal of Management Vol. 37 No. 4, 1069-1107

4) J. S. Levy (2003) Applications of Prospect Theory to Political Science Synthese

Vol. 135,, pp 215241

5) Rose McDermott (2004) Prospect Theory in Political Science: Gains and

Losses From the First Decade Political Psychology, Vol. 25, No. 2,

6) Kalyanaram, G. ,(1995) Empirical generalizations from . Marketing Science. 1995 Part 2 of 2, Vol. 14 Issue 3

7) Shefrin S. & Statman M. (1985) The Disposition to Sell Winners Too Early and Ride Losers Too Long: Theory and Evidence The Journal of Finance Vol. 40, No. 3, Papers and Proceedings of the Forty-Third Annual Meeting American Finance Association, Dallas, Texas, December 28-30 pp. 777-790

8) Plott C. & Zeiler K. (2007), Exchange Asymmetries Incorrectly Interpreted as Evidence of Endowment Effect Theory and Prospect Theory? The American Economic Review Vol. 97, No. 4 pp. 1449-1466

Ebooks:

1) K. Takemura- (2014) Behavioural Decision Theory Springer Heidelberg

2) L.R. Beach & T. Connolly (2005) The Psychology of decision making: People in organizations 2nd ed. Sage Publications

4) S. Dahmi (2016) The Foundations of Behavioural Economic Analysis Oxford University Press

5) P. . (2009)The Handbook of Rational and Social Choice Oxford University Press

Books:

1) D. Kahneman (2011) Thinking fast and slow Farrar, Straus & Giroux New York

Note that this is not a comprehensive reading list and other sources are possible. For the purposes of this essay you are expected to read around beyond the lecture notes- a mere rehashing of the lecture notes will get minimal marks.