IJSSER

Title: INVESTIGATING THE LEDDO, JAYANTI AND DUAN (2019) REVISED PROSPECT THEORY VALUE FUNCTION WITH JAPANESE STUDENTS
Authors: Karen Tun , Sara Tun , James Campbell and John Leddo
\|\| \|\|
Karen Tun1 , Sara Tun2 , James Campbell3 and John Leddo4 1,2. researchers at MyEdMaster 3. International Exchange Coordinator of Reitaku Mizunami Junior and Senior High School. 4. director of research at MyEdMaster, LLC
MLA 8 Tun, Karen, et al. "INVESTIGATING THE LEDDO, JAYANTI AND DUAN (2019) REVISED PROSPECT THEORY VALUE FUNCTION WITH JAPANESE STUDENTS." Int. j. of Social Science and Economic Research, vol. 7, no. 9, Sept. 2022, pp. 3024-3036, doi.org/10.46609/IJSSER.2022.v07i09.017. Accessed Sept. 2022. APA 6 Tun, K., Tun, S., Campbell, J., & Leddo, J. (2022, September). INVESTIGATING THE LEDDO, JAYANTI AND DUAN (2019) REVISED PROSPECT THEORY VALUE FUNCTION WITH JAPANESE STUDENTS. Int. j. of Social Science and Economic Research, 7(9), 3024-3036. Retrieved from https://doi.org/10.46609/IJSSER.2022.v07i09.017 Chicago Tun, Karen, Sara Tun, James Campbell, and John Leddo. "INVESTIGATING THE LEDDO, JAYANTI AND DUAN (2019) REVISED PROSPECT THEORY VALUE FUNCTION WITH JAPANESE STUDENTS." Int. j. of Social Science and Economic Research 7, no. 9 (September 2022), 3024-3036. Accessed September, 2022. https://doi.org/10.46609/IJSSER.2022.v07i09.017.
References [1]. Alghalith, M., Floros, C., & Dukharan, M. (2012). Testing dominant theories and assumptions in behavioral finance. Proquest. [2]. http://search.proquest.com/docview/1014252017/94778EE9FA05455CPQ/4?accountid=34939 [3]. Boucher, I. & Leddo, J. (2022). Investigating the Leddo, Jayanti and Duan (2019) revised Prospect Theory value function with Nicaraguan students. International Journal of Social Science and Economic Research, 7(4), 1141-1152. [4]. Gilovich, T., Griffin, D., & Kahneman, D. (Eds.) (2002). Heuristics and Biases: The Psychology of Intuitive Judgment. New York: Cambridge University Press. [5]. Gu, Y. & Leddo, J. (2022). Investigating the Leddo, Jayanti and Duan (2019) revised Prospect Theory value function with Chinese students. International Journal of Social Science and Economic Research, 7(6), 1618-1631. [6]. Haridon, O.L. & Vieider, F. M. (2019). All over the map: A worldwide comparison of risk preferences. Quantitative Economic, 10, 185-215. [7]. Heinrich, J., Heine, S.J. & Norenzayan, A. (2010). The weirdest people in the world. Behavioral and Brain Sciences, 33, 2-3. [8]. Jones, B.D. (2001). Politics and the Architecture of Choice: Bounded Rationality and Governance. London and Chicago: The University of Chicago Press. [9]. Kahneman, D., & Tversky, A. (1979). Prospect Theory: An Analysis of Decision Under Risk. Econometrica, 47(2), 263-91. [10]. Kahneman, D., & Tversky, A. (Eds.) (2000). Choices, Values, and Frames. Cambridge: Cambridge University Press. [11]. Leddo, J., Jayanti, A. & Duan, I. (2019). Prospect Theory Revisited: Incorporating Decision Maker’s Goals into the Value Function. International Journal of Social Science and Economic Research, 4(10), 6619-6640. [12]. Leddo, J & Shukla, A. (2020). Prospect Theory Revisited: Investigating the Applicability of a Revised Value Function on Decisions that Benefit the Self or Others. International Journal of Social Science and Economic Research, 5(9), 2672-2684. [13]. Leddo, J & Elkas, M. (2021). Prospect Theory Revisited: Viewing the results of framed decisions through a revised value function. International Journal of Social Science and Economic Research, 6(10), 3972-3983. [14]. Nwogugu, M. (2005). Towards multi-factor models of decision making and risk: A critique of Prospect Theory and Related Approaches, part I. The Journal of Risk Finance, 6, 2. pp. 160-162. [15]. Riabacke, A. (2006). Managerial Decision Making Under Risk and Uncertainty. IAENG International Journal of Computer Science, Retrieved from http://www.iaeng.org/IJCS/issues_v32/issue_4/IJCS_32_4_12.pdf [16]. Tversky, A., & Kahneman, D. (1981). The framing of decisions and the psychology of choice. Science, 211, 453-458. [17]. Weyland, K. (1996). Risk Taking in Latin American Economic Restructuring: Lessons from Prospect Theory. International Studies Quarterly, 40(2), 185-207. [18]. Weyland, K. (2006). Bounded Rationality and Policy Diffusion: Social Sector Reform in Latin America. Princeton and Oxford: Princeton University Press.
ABSTRACT: Prospect Theory (Kahneman and Tversky, 1979) is a highly influential theory that predicts decision making when people are confronted with choices involving gains or losses with different degrees of uncertainty. Prospect Theory argues that people are generally risk averse when it comes to seeking gains and risk seeking when it comes to avoiding losses. Leddo et al. (2019) noted that the original formulation of Prospect Theory did not take into account people’s goals. They argued that people would be willing to take risks to achieve goals but become more risk averse once those goals are achieved, and they would become risk averse when confronted with losses in order to avoid a highly negative outcome but become more risk seeking to negate the negative outcome once that outcome occurred. Leddo et al.’s research confirmed this hypothesis, leading to a revision of Prospect Theory’s value function. The present research investigates whether the same revised value function can predict decisions made by people in other cultures. Accordingly, the present paper replicated the Leddo and Shukla (2020) study that examined choice of standardized tests in high school students. In the present study 391 high school students in Japan, a large economy with a similar economic system to the US’s, were given the Leddo and Shukla (2020) scenarios involving gains and losses. Results showed that a pattern similar to that found in Leddo and Shukla (2020), consistent with the predictions made by the Leddo et al. (2019) revised Prospect Theory value function, in which students chose the riskier option in scenarios where outcomes were below the goal state, regardless of whether the outcomes involved gains or losses and chose the less risky option in scenarios where outcomes were above the goal state, regardless of whether the outcomes involved gains or losses.

IJSSER is Member of