This option controls how entities/characters gets processed by TinyMCE. The value can be set to numeric, named or raw. Where numeric is numeric representation such as " " named is entity names such as " " and raw is " ". The default value of this option is named, if named is used the entities option will be used to convert the codes into names.
Example of usage of the entity_encoding option:
tinyMCE.init({
...
entity_encoding : "raw"
});