Question: Consider a person with the following value function under prospect theory: v ( w ) = w .0.3 if w 0 =-2(- w )0.3if w

Consider a person with the following value function under prospect theory:

v(w) = w^.0.3if w0

=-2(-w)0.3if w < 0

Assume that this individual weight values by probabilities, instead of using the prospect theory weighting function. What is the value of the following prospect?

P1 (0.4, 1000, -800)

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