Question

According to prospect theory, the degree of ___ aversion is typically close to ________?

Answer 1

According to prospect theory, the degree of loss aversion is typically close to the loss magnitude.

Step-by-step explanation:

According to the prospect theory in economics, the degree of loss aversion is typically close to the loss magnitude. Loss aversion refers to the tendency for individuals to feel more pain or discomfort from a loss than pleasure from a gain of equal magnitude. For example, a $1 loss may be felt 2.25 times more intensely than a $1 gain.