Research at Sofia University >
Faculty of Economics and Business Administration >
Statistics and Econometrics / Статистика и иконометрия >

Please use this identifier to cite or link to this item: http://hdl.handle.net/10506/1004

Title: Utility function derived from affective balance theory
Authors: Mengov, George
Nikolova, S
Keywords: Utility Function
Affective Balance Theory
Cumulative Prospect Theory
Issue Date: 20-Mar-2013
Abstract: We propose a novel way to define a utility function, which is based on the differential equations of Affective Balance Theory. Introduced in 1987, that theory is more general than the Nobel Prize winning Prospect Theory, but remained poorly understood by the decision-making community due to its bottom-up approach to choice behaviour involving biophysical models of neuron interactions. Under the assumptions of equation equilibrium, and equivalence between utility and satisfaction, we obtain an analytical formula for the agent’s utility function. Into that formula, we set constants to values determined in advance from a mix of a psychological experiment with 129 participants and a computational optimizing procedure. The new utility function is asymmetric with respect to gains and losses, exactly as in Cumulative Prospect Theory.
Description: Mengov, G., and Nikolova S. (2008) Utility function derived from affective balance theory. Proceedings of the Bulgarian Academy of Sciences (Comptes Rendus), 61 (12), 1605-1612. (Impact Factor 2008: 0.152)
URI: http://hdl.handle.net/10506/1004
Appears in Collections:Statistics and Econometrics / Статистика и иконометрия

Files in This Item:

There are no files associated with this item.

View Statistics

Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.


Valid XHTML 1.0! DSpace Software Copyright © 2002-2010  Duraspace - Feedback