Prospect Theory

The effect where people think different under lose and gain.

  1. Risk Averse in Gain.

For High probability, the person will averse risk in gain. For example, if there option A of 90% chance of winning $10,000 and option B of 100% chance of winning $900. The person will take the option B.

2. Risk Loving in Lose.

For High probability, the person likes to take risk under lose. For example, if there are option A 90% of losing $10,000 and option B 100% chance of losing $900. The person will choose option A.

— Source: Wiki.