Definition 1 We call the conceiving state level, that people think something should be in actuality, the prospect level (PL) of the thing , and the actual state level of the thing is called the realized level (RL) of the prospect. The RL is the result of human behavior based on a PL. According to basic characters of human’ prospect behavior, we give the basic assumptions as follow:

Assumption 1 Non-negative. The lowest limit of PL is no prospect, i.e. PL equal to zero. The lowest limit of RL is no realization, i.e. RL equal to zero. So the PL and RL are all non-negative.

Assumption 2 Rationality. When keep off the prospect level gradually, the possibility that prospect is realized steps down gradually, i.e. the more far from PL the RL is, the less the possibility that the RL appears is. The lower the PL, the larger the possibility that the RL equal to zero is.

Assumption 3 Fluctuation. There is fluctuation in PL, and the fluctuation spread (i.e. the variance) of PL is non-negative.

Assumption 4 Continuity. RL is stochastic, and varies continuously.

If a prospect level is an average of prospects from most of people, we call it an average prospect level (APL). The Assumption 2 could be more expressed as: when the RL is lower than APL, the RL will become higher to tend to APL, and when the RL is higher than APL, the RL will become lower to tend to APL.

Prof. Feng Dai, Prof. Song-tao Wu, Prof. Ya-jun Zhuang

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