An important finding of prospect theory suggests that individuals
A) are more willing to take risks to achieve a gain than to avoid a loss.
B) are unable to make a rational decision in a moment of crisis.
C) never waver from the way cost-benefit decisions are made.
D) are more willing to take risks to avoid a loss than to achieve a gain.

Question

Quizplus · Accepted Answer

Prospect theory, developed by Kahneman and Tversky, suggests that people are more sensitive to potential losses than to equivalent gains, leading them to take greater risks to avoid losses than to achieve gains.

An Important Finding of Prospect Theory Suggests That Individuals