TESTS OF THEORIES OF DECISION-MAKING - VIOLATIONS OF BRANCH INDEPENDENCE AND DISTRIBUTION INDEPENDENCE

This paper investigates two behavioral properties of choices between g ambles: branch independence and distribution independence, Branch inde pendence is the assumption that probability-outcome branches that are identical in two gambles being compared should have no effect on prefe rence order, In the test of distribution independence, two middle outc omes of fixed probability are sandwiched between two extreme outcomes, common to both gambles, whose probabilities are varied, Distribution independence requires that preference order should be independent of t he probability distribution of these common outcomes., Distribution in dependence is implied by original prospect theory and the configural w eight model of Birnbaum and McIntosh (1996), For both properties, patt erns of violations are opposite those predicted by the inverse-S weigh ting function used in the model of cumulative prospect theory by Tvers ky and Kahneman (1992). (C) 1997 Academic Press.