3min chapter

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Why did Argentina invade the Malvinas/Falklands in 1982?

UCL Uncovering Politics

CHAPTER

Prospect Theory

Prospect theory is a theory in behavior economics that predicts people make different decisions depending on whether they think they are losing or winning. In particular, and in relation to this research, it predicts that human seem to be more willing to take risky decisions if they are in the domain of losses. When we are winning, we tend to the loss averse. But when we are losing, we tends to the risk prone. We might even try to bet twice as much to recover what we have at the beginning. This seems to be embedded in our gens. And some even argue that its a sort of evolutionary trat so key to the whole thing is the idea of a reference point which is

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