Reduction invariance and Prelec's weighting functions (Q1598979)

Within the framework of separable utility theory, a condition, called reduction invariance, is shown to be equivalent to the 2-parameter family of weighting functions that \textit{D. Prelec} [Econometrica 66, 497-527 (1998; Zbl 1009.91008)] derived from the condition called compound invariance. Both conditions are generalized leading to more general weighting functions that include, as special cases, the family of functions that Prelec called exponential-power and hyperbolic logarithm and that he derived from two other invariance principles.