In Developing Prospect Theory, Which of the Following Did Behavioral

question 155

Multiple Choice

In developing prospect theory, which of the following did behavioral economists not discover about people's reaction to goods and bads?

• A)People feel equivalent losses and gains in equal measure, supporting the assumption that consumers behave rationally.
• B)People are generally loss averse, feeling losses more intensely than gains.
• C)People judge good and bad outcomes relative to the status quo.
• D)People experience both diminishing marginal utility from gains and diminishing marginal disutility from losses.

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Definitions:

High Performance Work Practices

A set of management practices that are aimed at enhancing an organization's performance by improving employee involvement and commitment.

Company Profitability

A measure of how effectively a company generates profit from its operations, often assessed through ratios such as net margin.

Quality Circles

Small groups of employees who meet regularly to discuss and propose solutions to workplace problems, aiming to improve organizational performance and work environment.

Gainsharing Programs

Employee incentive plans that provide a share of the company’s profits based on performance metrics.