What does one important finding of prospect theory suggest about individuals?
A)Individuals are more willing to take risks to achieve a gain than to avoid a loss.
B)Individuals are unable to make a rational decision in a moment of crisis.
C)Individuals never waver from cost-benefit analysis.
D)Individuals are more willing to take risks to avoid a loss than to achieve a gain.

Question

Quizplus · Accepted Answer

Prospect theory, developed by Daniel Kahneman and Amos Tversky, suggests that people value gains and losses differently, leading to risk-averse behavior when considering potential gains and risk-seeking behavior when trying to avoid losses. This means individuals are more likely to take risks to avoid a loss than to achieve a gain.

What Does One Important Finding of Prospect Theory Suggest About