The prospect theory suggests that the threat of a loss has a greater impact on a decision than the possibility of an equivalent gain.

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The prospect theory, developed by Daniel Kahneman and Amos Tversky in 1979, states that people tend to be more risk-averse when facing potential gains and more risk-seeking when facing potential losses. In other words, the fear of losing something is typically stronger than the desire to gain something of equal value. This phenomenon is known as loss aversion.

The Prospect Theory Suggests That the Threat of a Loss