Prospect Theory, proposed by psychologists Daniel Kahneman and Amos Tversky, is a behavioral economic theory that describes how people make decisions under uncertainty. It suggests that individuals evaluate potential gains and losses relative to a reference point (usually the status quo) and exhibit risk aversion when faced with potential losses, but risk-seeking behavior when faced with potential gains.

Losing hurts more than winning feels good 😨📉 Peoplefear losses more than they enjoy gains.

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