New decision model revolutionizes risk assessment for better decision-making.
The article introduces a new decision model based on prospect theory to better understand how people make choices when faced with risks. Instead of using traditional methods like loss functions or utility theory, this model focuses on maximizing prospect value to determine decision rules. By analyzing thresholds and providing specific solutions, the model offers a more effective way to make decisions in uncertain situations. The researchers conducted a case study and experimental analysis to show that their model outperforms other existing models in capturing real risk attitudes.