Prospect theory - 3 key aspects

Choose between P1($240) and P2(.25, $1,000).

• P1

• P2

Choose between P3(−$750) and P4(.75, −$1000).

• P3

• P4

Assume yourself richer by $300 than you are today. Then choose between P5($100) and P6(.50, $200).

• P5

• P6

Assume yourself richer by $500 than you are today. Then choose between P7(−$100) and P8(.50, −$200).

• P7

• P8

What value of x would make you indifferent between P9(0) and P10(0.50, x, −$25)?

Choose between prospects P11(0.001, $5,000) and P12(1.0, $5).

• P11

• P12

Choose between prospects P13(0.001, −$5,000) and P14(1.0, −$5).

• P13

• P14

Decision (i): Choose between P15(0.80, $4,000) and P16(1.00, $3,000).

• P15

• P16

Decision (ii): Choose between P17(0.20, $4,000) and P18(0.25, $3,000).

• P17

• P18

Decision (i): Choose between P19(0.45, $6,000) and P20(0.90, $3,000).

• P19

• P20