According to Kahneman and Tversky's value function, which of the following gifts provide higher total values:
A)4 different gains of $25 each
B)2 different gains of $50 each
C)1 gain of $100 each
D)All provide exactly the same value

Question

Quizplus · Accepted Answer

Kahneman and Tversky's value function, part of prospect theory, suggests that people derive more satisfaction from multiple smaller gains than from a single large gain of equivalent total value. This is because the value function is concave for gains, indicating diminishing sensitivity as gains increase. Therefore, 4 different gains of $25 each would provide higher total value than the other options.

According to Kahneman and Tversky's Value Function, Which of the Following