Summary, implications, and outlook

Abstract

Prospect theory has done more to describe actual human decision behavior by bringing psychology concepts into the heart of economics models than any theo-ry of decision making or even any other approach. As a result, prospect theory has gained much ground in recent years. According to Montier (2002, p. 20), “Prospect theory bears more than a passing resemblance to expected utility theo-ry.” However, the findings on reference points as one of the most pronounced empirical phenomena in decision under risk and uncertainty are lacking within this theory.