Kahneman and Tversky’s (1979) “Prospect Theory” article is the most cited paper in the history of economics, and it won Kahneman the Nobel Prize in 2002. Among other things, it predicts that people are risk seeking for unlikely gains (e.g., they pay more than $1 for a 1% chance of $100) but risk averse for... The post [124] "Complexity": 75% of participants missed comprehension questions in AER paper critiquing Prospect Theory appeared first on Data Colada.| Data Colada