A Complete Non-Parametric Measurement of Prospect Theory on Professional Athletes

This study measures all the elements of prospect theory on professional athletes. The measurement is completely non-parametric and can elicit both the utility function and probability weighting function. The measurement is similar to the method used by Abdellaoui et al. (2013), but it is extended so that also probability weights are elicited. Since the utility functions for gains and losses are connected this method allows for the calculation of loss aversion. This study is to my best knowledge the first to measure prospect theory completely non-parametrically. In total 24 professional Dutch field hockey players were interviewed and compared to a homogenous group. The findings in this study support the evidence of prospect theory as a model to describe decisions under risk. I did not find significant differences between professional athletes and non-professional athletes except for a significant lower β for professional athletes. This implies that professional athletes are more risk seeking for losses.