Mental accounting is closely associated with prospect theory.

Name: Mental accounting is closely associated with prospect theory.
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Mental accounting, a concept introduced by Richard Thaler, is closely associated with prospect theory, developed by Daniel Kahneman and Amos Tversky, as it deals with how people mentally categorize their finances into different accounts, affecting their decision-making and risk perception, which are key elements in prospect theory.

Mental Accounting Is Closely Associated with Prospect Theory