A note on the connection between the Tsallis’ thermodynamics and cumulative prospect theory

Authors

  • Daniel Oliveira Cajueiro Universidade de Brasília
  • Bernardo de Assunção Mello Universidade de Brasília

Abstract

This note presents explicitly a strong connection between the Tsallis thermodynamics and the so-called prospect theory introduced to take into account agent’s decisions under risk. Moreover, using the cumulative prospect theory adapted here for a continuous framework, we show that if the Tsallis parameter q belongs to the interval [0,1], then the prospect theory requirement that extreme events are overvalued is satisfied.

Downloads

Download data is not yet available.

Downloads

Published

2013-07-30

Issue

Vol. 10 No. 1 (2010)

Section

Artigos

License

The submission of a manuscript authorizes its publication by the Brazilian Journal of Business Economics/Revista Brasileira de Economia de Empresas and implies that it refers to original work, which is not currently submitted to any other journal. It is forbidden any reproduction, partial or total, by any other media, either press or digital, of the published papers. In this case, previous and necessary authorization must be requested. In case it is obtained, one must include a formal acknowledgement to the BJBE/RBEE, which is the first publisher of the paper. The BJBE/RBEE does not pay any copyright to the authors of published papers.

Copyright and Licensing

The copyrighter of the BJBE/RBEE is the Editora Universa of the Universidade Católica de Brasília.

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

Submitting an article authorizes its publication and implies a commitment that the same material will not be submitted to another journal.

The journal does not pay royalties to the authors of published articles.