A thread through the archive

prospect theory

Essays tagged “prospect theory”. Follow an idea across the archive.

Essays on prospect theory

2 essays

Jul 10, 2011LW

Prospect Theory: A Framework for Understanding Cognitive Biases

Scott explains prospect theory, Kahneman and Tversky's model of how people actually make decisions, showing how its value and probability weighting functions predict numerous cognitive biases including loss aversion, scope insensitivity, and framing effects.

8 min read 1,202 words

Jul 21, 2009LW

Shut Up And Guess

Scott calculates that on exams penalizing wrong answers at half the reward for correct ones, guessing always has positive expected value, but none of his intelligent classmates would accept this logic despite clear explanations.

11 min read 1,700 words

calibration cognitive bias decision making