The Kahneman-Tversky value function provides a rationale for
A)putting several Christmas gifts in one big box for your special friend.
B)paying cash rather than using a credit card.
C)requiring employees to take all their vacation days in two weeks rather than taking scattered days throughout the year.
D)car dealers offering rebates rather than a price reduction on a car.

Question

Quizplus · Accepted Answer

The Kahneman-Tversky value function suggests that individuals are more sensitive to losses than gains of equal magnitude. Rebates offer a psychological advantage to car dealers because customers perceive the rebate as a gain, and the reduced price as the baseline. In contrast, if the car was simply offered at a reduced price, the customer might perceive it as a loss from the original price.

The Kahneman-Tversky Value Function Provides a Rationale for