Why do we fear losses more than we value gains, or obsess over unlikely disasters while downplaying probable success? Psychologist Daniel Kahneman’s prospect theory reveals that emotions—not pure logic—drive most of our choices. Prospect theory explains how we evaluate options based on reference points rather than absolutes, why proportional changes matter more than fixed amounts, and why loss aversion shapes our behavior more powerfully than any potential reward. Learn more about how understanding prospect theory can help you recognize emotional biases in your own decision-making and make more intentional choices.
Daniel Kahneman’s Prospect Theory: The Ultimate Guide










