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prospect theory

A theory, developed by the economists Daniel Kahneman and Amos Tversky, that seeks to explain how individuals make decisions when faced with uncertainty. It is central to the growing new ...

prospect theory

prospect theory   Quick reference

A Dictionary of Economics (5 ed.)

Reference type:
Subject Reference
Current Version:
2017
Subject:
Social sciences, Economics
Length:
76 words

...prospect theory A theory of choice in the presence of risk . Prospect theory embodies the empirical observations that individuals place excessive weight on outcomes that occur with low probability and place greater emphasis on small losses than on small gains. The pay-off function in prospect theory is convex for losses and concave for gains, where losses and gains are measured relative to a reference point. Prospect theory is an alternative to expected utility theory...

prospect theory

prospect theory   Reference library

Dictionary of the Social Sciences

Reference type:
Subject Reference
Current Version:
2002
Subject:
Social sciences
Length:
172 words

... theory A social-psychological theory of decision making under conditions of risk and uncertainty, developed by Daniel Kahneman and Amos Tversky . Prospect theory analyzes the biases and interpretive strategies that shape people's choices in the face of uncertain outcomes. It helps to illuminate experimental results that show that individuals often make divergent choices in situations that are substantively identical but framed differently. Prospect theory has identified four significant tendencies in how individuals construe choices: (1) the ...

prospect theory

prospect theory   Quick reference

A Dictionary of Finance and Banking (5 ed.)

Reference type:
Subject Reference
Current Version:
2014

... theory A theory, developed by the economists Daniel Kahneman (1934– ) and Amos Tversky (1937–1996), that seeks to explain how individuals make decisions when faced with uncertainty. It is central to the growing area of research known as behavioural finance , which posits that psychology plays a major part in financial decision making. In essence, prospect theory has three components, which concern the role played by decision frames, mistakes in relation to evaluating probabilities, and a risk preference structure. To help them make a decision...

prospect theory

prospect theory   Quick reference

A Dictionary of Business and Management (6 ed.)

Reference type:
Subject Reference
Current Version:
2016
Subject:
Social sciences, Business and Management
Length:
155 words

... theory A theory, developed by the economists Daniel Kahneman and Amos Tversky , that seeks to explain how individuals make decisions when faced with uncertainty. It is central to the growing area of research known as behavioural finance , which posits that psychology plays a major part in financial decision making. In essence, prospect theory has three components, which concern the role played by decision frames, mistakes in relation to evaluating probabilities, and a risk preference structure. To help them make a decision individuals use a...

prospect theory

prospect theory   Quick reference

A Dictionary of Finance and Banking (6 ed.)

Reference type:
Subject Reference
Current Version:
2018

... theory A theory, developed by the economists Daniel Kahneman ( 1934– ) and Amos Tversky ( 1937–96 ), that seeks to explain how individuals make decisions when faced with uncertainty. It is central to the growing area of research known as behavioural finance , which posits that psychology plays a major part in financial decision making. In essence, prospect theory has three components, which concern the role played by decision frames, mistakes in relation to evaluating probabilities, and a risk preference structure. To help them make a decision...

prospect theory

prospect theory n.   Quick reference

A Dictionary of Psychology (4 ed.)

Reference type:
Subject Reference
Current Version:
2015
Subject:
Science and technology, Psychology, Medicine and health, Psychiatry
Length:
446 words
Illustration(s):
1

... theory n . A theory of preferences among outcomes involving risk ( 2 ) formulated in 1979 by the Israeli‐American psychologists Daniel Kahneman (born 1934 ) and Amos Tversky ( 1937–96 ) as an alternative to expected utility theory. According to prospect theory, human preferences tend to violate expected utility (SEU) theory in the following ways: people tend to evaluate outcomes as gains or losses relative to their current situation or the status quo rather than in terms of absolute value; they tend to attach greater weight to losses than to...

prospect theory

prospect theory   Reference library

Australian Law Dictionary (3 ed.)

Reference type:
Subject Reference
Current Version:
2018
Subject:
Law
Length:
112 words

...prospect theory (also called loss aversion theory ) The important insight from behavioural economics, developed by Kahneman and Tversky, that when choosing between alternatives on the basis of probability (i.e. in conditions of uncertainty) people assess potential losses and gains differently; faced with the same outcome presented two ways (framed in terms of the potential wins, or in terms of the potential losses), they are more likely to choose the positively presented version, although the expected distribution would be 50:50 if emotions were not in play...

Prospect Theory and Foreign Policy Analysis

Prospect Theory and Foreign Policy Analysis   Reference library

Jeffrey W. Taliaferro

The International Studies Encyclopedia

Reference type:
Subject Reference
Current Version:
2017
Subject:
Social sciences, Politics, Warfare and Defence
Length:
10,750 words
Illustration(s):
2

...application of prospect theory? And what, if any, comparative advantage or added value can prospect theory bring to an expected-utility analysis” (2004a:148)? The last section of this essay addresses those questions. Perhaps the greatest conceptual and methodological difficulties with the first and second generations of prospect theory literature revolve around the issues of reference point selection, framing, and preference reversal outside laboratory settings. As Levy observes, prospect theory “is a reference-dependence theory without a theory of the...

Prospect Theory in International Relations

Prospect Theory in International Relations   Reference library

Janice Gross Stein

The Oxford Encyclopedia of Empirical International Relations Theory

Reference type:
Subject Reference
Current Version:
2018
Subject:
Social sciences, Politics
Length:
6,958 words

...dynamics on framing and choice. Prospect theory, developed in the lab, paid little attention to the scope conditions that would shape its impact outside ( Boettcher, 2004 ). Prospect Theory and International Security Prospect theory has been used to explain decision making behavior during crises. Early case studies, using archival material, memoirs, interviews and comparative case studies, demonstrated the counter-intuitive impact of loss aversion on deterrence strategy and examined its implication for deterrence theory ( Stein, 1985 ). Farnham explained...

prospect theory

prospect theory  

A theory, developed by the economists Daniel Kahneman and Amos Tversky, that seeks to explain how individuals make decisions when faced with uncertainty. It is central to the growing new area of ...
Titus Andronicus

Titus Andronicus   Reference library

Sonia Massai and Anthony Davies

The Oxford Companion to Shakespeare (2 ed.)

Reference type:
Subject Reference
Current Version:
2015
Subject:
Literature, Shakespeare studies and criticism, Performing arts, Theatre
Length:
2,504 words
Publisher:
Oxford University Press

...by Lucius are marching towards Rome. Tamora reassures Saturninus and explains how she will get Titus to agree to summon his son Lucius to Rome and arrange a parley with him. 5.1 Aaron is captured by Lucius and boasts about his evil deeds; he is unrepentant and unabashed by the prospect of death. 5.2 Tamora disguises herself as Revenge and visits Titus accompanied by her two sons, who are themselves disguised as her ministers, Murder and Rape. Tamora believes Titus to be mad as a result of his sorrows, but Titus sees through her disguise. He pretends to comply...

The Two Gentlemen of Verona

The Two Gentlemen of Verona   Reference library

Michael Dobson, Will Sharpe, and Anthony Davies

The Oxford Companion to Shakespeare (2 ed.)

Reference type:
Subject Reference
Current Version:
2015
Subject:
Literature, Shakespeare studies and criticism, Performing arts, Theatre
Length:
2,682 words
Publisher:
Oxford University Press

...Thurio, threatened by Valentine, renounces his own claim on Silvia, she is bestowed by the Duke on Valentine. Valentine successfully requests the Duke to repeal the outlaws’ banishment along with his own, and with the double marriage of Valentine and Silvia, Proteus and Julia in prospect, all set off back towards Milan. Artistic features: The play shows a reliance on soliloquy, asides, and duologues unique in the canon: one of the reasons the famous serenade scene, 4.2, stands out so vividly is that it is one of the play’s only fully successful scenes involving...

Natural Philosophy (Science)

Natural Philosophy (Science)   Reference library

An Oxford Companion to the Romantic Age

Reference type:
Subject Reference
Current Version:
2009
Subject:
History, modern history (1700 to 1945), Literature
Length:
5,186 words
Publisher:
Oxford University Press

...nature, one that sought a genetic account of the development of the present order from the past. The Scottish natural philosopher James *Hutton played a major role in the establishment of another new science, geology, arguing in his Theory of the Earth ( 1795 ) that earth history showed ‘no vestige of a beginning—no prospect of an end’. This concept of ‘deep time’ (as it is now called) provided an explanatory framework for the study of the processes by which the strata of rocks were formed and eroded, and for the laws and causes governing the movements of...

Richard III

Richard III   Reference library

Randall Martin and Anthony Davies

The Oxford Companion to Shakespeare (2 ed.)

Reference type:
Subject Reference
Current Version:
2015
Subject:
Literature, Shakespeare studies and criticism, Performing arts, Theatre
Length:
3,559 words
Publisher:
Oxford University Press
Illustration(s):
1

...Edward, for the sake of her beauty, and that she must now charitably believe his motives were sincere. At first Anne scorns his claims, but ultimately, though still reluctantly, she yields. 1.3 Queen Elizabeth and her sons Dorset and Grey worry about Edward IV’s illness and the prospect of Gloucester becoming protector over Prince Edward. Gloucester questions her family’s loyalty to the Yorkists. Queen Margaret curses everyone with predictions of misfortune and death. Richard sends two murderers to dispatch Clarence. 1.4 Clarence recounts a nightmare in which...

Exploration

Exploration   Reference library

An Oxford Companion to the Romantic Age

Reference type:
Subject Reference
Current Version:
2009
Subject:
History, modern history (1700 to 1945), Literature
Length:
4,825 words
Publisher:
Oxford University Press

...followed publications such as John *Hawkesworth 's An Account of the Voyages Undertaken by the Order of his Present Majesty for Making Discoveries in the Southern Hemisphere ( 1773 ), the engraving could only have been read as a juxtaposition of a patriotic mission with the prospect, if not the actuality, of sexual and commercial corruption. So far from inaugurating the improvement of savages, the voyagers' introduction of prostitution, and eager traffic in supplies, specimens, and baubles, exacerbated the supposed voluptuousness that might already be...

Poverty

Poverty   Reference library

An Oxford Companion to the Romantic Age

Reference type:
Subject Reference
Current Version:
2009
Subject:
History, modern history (1700 to 1945), Literature
Length:
6,179 words
Publisher:
Oxford University Press

...of poverty and philanthropy, although they reached very different conclusions. Were the poor laws subject to commercial or constitutional logic, for example? Was necessity or reward the best incentive to labour; how beneficial were high wages? Smith offered an influential prospect of commercial expansion and improving living conditions, whereas Malthus shed the earlier optimism of the political economists and argued in the late 1790s that the poor were condemned to misery, since unchecked population growth would always exceed the means of subsistence....

Political Economy

Political Economy   Reference library

An Oxford Companion to the Romantic Age

Reference type:
Subject Reference
Current Version:
2009
Subject:
History, modern history (1700 to 1945), Literature
Length:
5,138 words
Publisher:
Oxford University Press

...living standards that had elapsed since the beginning of the reign of Elizabeth , ‘a period’, according to Smith, ‘as long as the course of human prosperity usually endures’. Smith's optimism is chiefly confined to what had been achieved in retrospect rather than what lies in prospect. He had no great confidence that wisdom would always prevent the ‘ordinary revolutions of war and government’ from putting an end to the growth of national opulence, though he believed that there was ‘a great deal of ruin’ in nations. If any single discovery was crucial to the...

15 Children’s Books

15 Children’s Books   Reference library

The Oxford Companion to the Book

Reference type:
Subject Reference
Current Version:
2010
Subject:
History, Social sciences
Length:
4,997 words
Publisher:
Oxford University Press

...good reading habits as the best way to exploit educational opportunities and to secure a productive and fulfilled future. Thus, the book stands both as the primary means of instruction and as a potent symbol of literacy, promising the possession of cultural capital and the prospect of social advancement. Yet at the same time the school book also represents compulsory reading, to be associated with the regimentation of the classroom. Often, in the elementary school book, cultural expectations, social realities, and teleologies underlying developmental...

Democracy

Democracy   Reference library

An Oxford Companion to the Romantic Age

Reference type:
Subject Reference
Current Version:
2009
Subject:
History, modern history (1700 to 1945), Literature
Length:
5,165 words
Publisher:
Oxford University Press

...restore the freedom of open political agitation despite the repressive legislation of 1819 . The vast majority of radicals and reformers used constitutional means and peaceful tactics. This does not mean, however, that all radicals opposed the use of force or that there was no prospect of revolution in Britain during this period. There were a number of occasions when economic distress, industrial disorder, and popular radicalism might have led to armed *insurrection or even revolution. The Luddite industrial disorder of 1811–13 , the widespread distress and...

Land

Land   Reference library

An Oxford Companion to the Romantic Age

Reference type:
Subject Reference
Current Version:
2009
Subject:
History, modern history (1700 to 1945), Literature
Length:
4,951 words
Publisher:
Oxford University Press

...1830s taking seriously Spencean land proposals. In Wordsworth's landscape poetry, we find an ameliorative version of improvement. Wordsworth's attention to the migrations produced through the displacements of war, famine, and the enclosures of wastes brought into his poetic prospect a population of marginal wanderers; yet Wordsworth increasingly naturalizes such economically and socially engineered dissonance in the countryside. He introduces dislocated humans into a vocabulary of natural waste: ‘as in nature so he lived, so let him die’, he writes of the...

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