One aspect of prospect theory is that people tend to
A) be very risk averse to large gains.
B) be very risk averse to losses.
C) love losses more than gains.
D) hate gains regardless of potential losses.

Question

Quizplus · Accepted Answer

Prospect theory suggests that people are more sensitive to losses than gains, meaning they are more risk averse when it comes to losses. This asymmetry in the way people perceive and respond to gains and losses has been observed in numerous experimental settings, and is seen as a fundamental aspect of human decision-making.

One Aspect of Prospect Theory Is That People Tend to