Which of the following is a property of an S-shaped curve that corresponds to the prospect theory value function?
A)The curve passes through the reference point at the origin.
B)Both sections of the curve are convex to the horizontal,outcome axis.
C)The curve is symmetric with respect to gains and losses.
D)None of the above.

Question

Quizplus · Accepted Answer

The S-shaped curve in prospect theory represents the value function, which is concave for gains and convex for losses, indicating diminishing sensitivity. It passes through the reference point (usually the status quo or a point of reference), which is represented by the origin, illustrating how outcomes are perceived as gains or losses relative to this point.

Which of the Following Is a Property of an S-Shaped