A Model of Casino Gambling Using Prospect Theory

Speaker: 

Vineeth Chintala

Affiliation: 

School of Technology and Computer Science
Tata Institute of Fundamental Research
Homi Bhabha Road, Navy Nagar
Mumbai 400005

Time: 

Tuesday, 20 June 2017, 14:30 to 15:30

Venue: 

Organisers: 

The first part of the talk will be an introduction to Kahneman and Tversky's seminal Prospect Theory, which is a descriptive theory of how people evaluate risk. We will then see a rich model of casino gambling, which captures some features of actual gambling behavior (Barberis 2012).  We will analyze, in particular, time inconsistencies that are observed in casinos : a player might enter the casino with an exit strategy in mind; but once he starts playing, he wants to switch to a different strategy.