Ah, but I’m not looking for a merely descriptive theory, but for one that was also rational and logicaly consistent. And using prospect theory for every small decision in your life will leave you worse off than using expected utility for every small decision.
There’s nothing wrong I can see about using prospect theory for the mega-risk decisions, though—I wouldn’t do so, but there seems no logical flaw in the idea.
Ah, but I’m not looking for a merely descriptive theory, but for one that was also rational and logicaly consistent. And using prospect theory for every small decision in your life will leave you worse off than using expected utility for every small decision.
There’s nothing wrong I can see about using prospect theory for the mega-risk decisions, though—I wouldn’t do so, but there seems no logical flaw in the idea.