Prospect theory predicts that when given the choice between two options,people will choose the option associated with the greatest objective value.

Question

Quizplus · Accepted Answer

Prospect theory predicts that people's decision-making is not solely based on objective value, but also on subjective factors such as perceived losses and gains, risk aversion, and reference points. Therefore, people may choose an option that is not objectively the best if they perceive it as less risky or as a gain relative to a reference point.

Prospect Theory Predicts That When Given the Choice Between Two