Prospect Theory suggests that the utility function is convex over losses and also that the slope of the utility function over losses is steeper than the slope of the utility function over gains.

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Prospect Theory, developed by Daniel Kahneman and Amos Tversky, posits that people value gains and losses differently, leading to a value function that is generally concave for gains (implying risk aversion), convex for losses (implying risk seeking in the domain of losses), and steeper for losses than for gains, indicating that losses loom larger than gains.

Prospect Theory Suggests That the Utility Function Is Convex Over