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What is prospect theory?What Is Prospect Theory? The Moment Where Economic Theory Meets Human Behavior A person is offered two choices: A guaranteed gain of $500 A 50% chance to gain $1,000, and a 50% chance to gain nothing Most people choose the guaranteed $500. Now reverse the framing: A guaranteed loss of $500 A 50% chance to lose $1,000, and a 50% chance to lose nothing Now most...0 Σχόλια 0 Μοιράστηκε 279 Views 0 Προεπισκόπηση
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Why do people fear losses more than gains?Why Do People Fear Losses More Than Gains? The Asymmetry That Shows Up Everywhere A person is offered a choice: Receive $100 for sure Or flip a coin: win $200 or win nothing Most people hesitate, then choose the sure $100. Now reverse the structure: Lose $100 for sure Or flip a coin: lose $200 or lose nothing Now many people take the gamble. Nothing in the...0 Σχόλια 0 Μοιράστηκε 444 Views 0 Προεπισκόπηση
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Why do people make bad financial decisions?Why Do People Make Bad Financial Decisions? The Paradox Inside Every Bank Account A man pays $35 in overdraft fees to avoid withdrawing from his savings account. A woman carries credit card debt at 22% interest while keeping money in a low-yield savings account. An investor sells during a market dip and re-enters after recovery—buying high, selling low, despite knowing the pattern....0 Σχόλια 0 Μοιράστηκε 214 Views 0 Προεπισκόπηση