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Keywords:

  • Teaching;
  • Prospect theory;
  • Behavioural economics;
  • Utility measurement;
  • Loss aversion;
  • Deal or No Deal;
  • Risk

Summary

Recent evidence indicates that decision makers are more sensitive to potential losses than gains. Loss aversion psychology has led behavioural economists to look beyond expected utility by developing prospect theory. We demonstrate this theory using the Deal or No Deal game show.