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Conversations with History: Daniel Kahneman

Asymmetric_Value_Function

Conversations host Harry Kreisler welcomes Princeton Psychology Professor Daniel Kahneman for a discussion of his Nobel prize winning research on intuition and decision making (prospect theory)

People behave as if they would compute a value (utility), based on the potential outcomes and their respective probabilities, and then choose the alternative having a higher utility.

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A advantage of Prospect Theory is that it does not assume people to behave constantly the same, but simply behave accordingly to their preferences when facing gains or losses- thus getting rid of Reflection effects.

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