Reexamination of Prospect Theory - Evidence from Junior High Students

• Main Authors: Chia-Ling Tsai, 蔡佳伶
• Other Authors: Hsiao-Ping Tsen
• Format: Others
• Language: zh-TW
• Published: 2014
• Online Access: http://ndltd.ncl.edu.tw/handle/vx2w47

碩士 === 健行科技大學 === 財務金融系碩士班 === 103 === "Prospect Theory" was proposed by Kahneman and Tversky in 1979. They conducted a questionnaire survey and found that the risk preference of respondents were in violation of traditional Expected Utility Theory. They pointed out that the risk attitude of people was inconsistent in different situations - when gaining profits, investors’ risk tolerance was risk aversion; when making a loss, investors’ risk tolerance was risk seeking. Then they proposed three effects: Certainty Effect, Reflection Eeffect and Isolation Effect. In order to verify compliance with prospect theory, especially the ninth grade students, we conducted a questionnaire survey about it. A total of 206 questionnaires were distributed, 206 questionnaires were recovered. The recovery was 100%. 204 questionnaires were valid, so the effective rate was 99.03%. We found there are five questions to correspond with the Certainty Effect when they gain profits, and there are three questions in line with the Reflection Effect when they have a loss. The study shows that the risk tolerance of 77% junior high students is low, in other words, their risk attitude is risk aversion. Therefore, our results indicate that junior high school students are partly consistent with Prospect Theory.