________ applies when a person places more value on avoiding losses than attempting to realize gains.
A) The availability heuristic
B) Prospect theory
C) The trait ascription bias
D) The halo effect
E) The availability cascade

Question

Quizplus · Accepted Answer

Prospect theory, which was developed by Kahneman and Tversky, proposes that people's decisions are often influenced by their attitudes towards risk. In particular, it suggests that people tend to place more emphasis on avoiding losses than on maximizing gains. Therefore, option B is the best choice for the question.

________ Applies When a Person Places More Value on Avoiding