Kahueman and Tversky (1979) proposes that people have a (a) . That is, their reaction to losses is more intense than reactions to similar gains. In other words, losing $500 will result in more (b) feelings than The (c) feelings generated from winning $500. Other researchers have also found that most people do not like to take risks. Instead, when risky choices are made, it is usually because it is (d) as such. In such cases, the decision maker's conception of the decision —making situation [called (e) ) may have been in?uenced by a more positive formulation of the same problem.

The blanks can be filled according to the Kahneman and Tversky 1979 prospect theory.

Step-by-step explanation

Kahneman and Tversky (1979) proposes that people have a a) loss aversion tendency. That is their reaction to losses is more intense than the reaction to similar gains. In other words, losing $500 will result in more b) aggravated feelings than the c) pleasure feelings generated from winning $500. Other researchers have also found that most people don't like to take risks. Instead, when risky choices are made, it is usually because it is a d) loss as such. In such cases, the decision maker's conception of the decision-making situation called e) Prospect theory may have been influenced by a more positive formulation of the same problem.

Explanation

Loss aversion- people hate loss more than they enjoy gains.

Kahneman and Tversky suggested that the aggravation that one experiences in losing a sum of money appears to be greater than the pleasure associated with gaining the same amount.

Prospect theory is a behavioral model that describes the how people take decisions when presented with alternatives that involve risk, probability, and uncertainty.