Prospect Theory: An Analysis of Decision under Risk – Daniel Kahneman and Amos Tversky

Prospect Theory describes the way people choose between probabilistic alternatives that involve risk, where the probabilities of outcomes are known. The theory was created in 1979 and developed in 1992 by Daniel Kahneman and Amos Tversky as a psychologically more accurate description of decision making, compared to the expected utility theory (Wikipedia).

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