Given the emphasis on the status quo by prospect theory, which of the following is most likely true?
A)In international trade, actors may find it easier to agree on how to share the losses than on how to distribute the gains from trade.
B)In international trade, actors may find it easier to come to a trade agreement in which both sides equally gain.
C)In international trade, actors may find it easier to agree on how to distribute the benefits from a trade agreement than on how to share the losses.
D)In international trade, actors may find it easier to walk away from a trade deal when it is clearly not in their favor.

Question

Quizplus · Accepted Answer

Prospect theory suggests that people are more sensitive to losses than to gains, which implies that actors may find it easier to agree on distributing benefits rather than sharing losses.

Given the Emphasis on the Status Quo by Prospect Theory