Prospect Theory

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120sintermediate (6/10)state theorem

Prospect theory replaces expected utility with V (p_{1} r_{1} + \dots + p_{n} r_{n}) where outcomes are weighted by a value function v (\cdot) . Empirically, the value function has v^{'} (0^{-}) > v^{'} (0^{+}) and is concave for gains, convex for losses. What does this imply?