It turns out that certain combinations of tau and alpha are consistent with risk mattering less.
Surprise: the model also provides an explanation for the uncertainty effect, a finding that Uri Gneezy, @johnlist.bsky.social, and I wrote up 20 years ago. academic.oup.com/qje/article-...
17/N
Abstract. Expected utility theory, prospect theory, and most other models of risky choice are based on the fundamental premise that individuals choose amon
