Prospect theory
Kanehman and Tversky an analysis of decision under risk 1986 paper criticised The expected utlity theory; arguing that individuals do not always incorporate thier outcomes with exisitng assets. Kanehman and Tversky demonstarted this in a phenomenon they called the isolation effect. Kanhaman and Tversky found that the nature reference point in which individuals use to determine an outcome as a loss or gain can be influenced by the way a discription of a problem is framed.
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