Prospect Theory: An Analysis of Decision under Risk

Kahneman & Tversky · Culture & Context, Measurement & Method · Econometrica · 1979 · Open access

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The foundational paper introducing Prospect Theory — a descriptive model of decision-making under risk that systematically departs from expected utility theory. Key findings: losses loom larger than equivalent gains (loss aversion); people are risk-averse for gains but risk-seeking for losses; outcomes are evaluated relative to a reference point, not in absolute terms. Directly relevant to the calculus of voice: the asymmetric weighting of costs and benefits explains why speaking up feels riskier than staying silent even when the expected value favours voice.

Kahneman, D. and Tversky, A. (1979) 'Prospect theory: An analysis of decision under risk', Econometrica, 47(2), pp. 263–291.

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