Winning strategy for binary option
In such models, choice proportions far from 50 would be reason for rejection. ) The lower half of Table 5 offers three important insights: First, both versions of Cumulative Prospect Theory are rejected on two thirds of the participants. Second, in those cases where either of these versions of Cumulative Prospect Theory fits a participant for one stimulus set, it does so also in the other stimulus set, hence, the successful fits are highly replicable.
Third, the only predicted preference patterns that are not rejected, are the ranking of the gambles by decreasing winning amount (abcde in Cash I and ABCDE in Cash II), and the ranking of the gambles by increasing probability of winning (edcba in Cash I and EDCBA in Cash II).