We respond differently to the same facts depending on whether it presents either as a gain or a loss; that is what the Prospect Theory says. We go for the sure gain even if it is perceived as smaller than the much more significant unsure gain. But, we go for…

Updated on March 25, 2023 We are not rational when we make choices under risk and uncertainty. This is because we prefer certainty. We do not want to live in uncertainty. Look at the following scenarios; These examples appear in Daniel Kahneman and Amos Tversky’s 1979 paper on prospect theory….