One Assumption of Prospect Theory Is Called the Certainty Effect

question 158

Multiple Choice

One assumption of prospect theory is called the certainty effect.This means that:

• A)when making decisions,people give greater weight to outcomes that are a sure thing.
• B)people are certain that they want to avoid risk but are unsure that they want to maximize gains.
• C)when making decisions,people rely more on past outcomes than on future speculations.
• D)people are certain that they want to maximize gains but are unsure that they want to avoid risks.

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Definitions:

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