New model explains decision-making paradoxes, revolutionizing understanding of risk attitudes.
The researchers found that traditional theories about decision-making under risk don't always match real-life behavior. They introduced a new model called Target-Adjusted Utility (TAU) that considers a specific target return when making choices. This TAU model explains common decision-making paradoxes better than previous theories. By analyzing data from experiments, they showed that TAU is effective in predicting how people make decisions in uncertain situations.