Which of the following is a key part to the elements of prospect theory?
A) People think of gains and losses with respect to some reference point.
B) People are loss averse, meaning that losses count half as much as equivalent gains.
C) People are risk seeking concerning gains and risk averse concerning losses.
D) People tend to undervalue small probabilities.

Question

Quizplus · Accepted Answer

Prospect theory suggests that people evaluate outcomes as gains or losses relative to a reference point, rather than in absolute terms.

Which of the Following Is a Key Part to the Elements