An executive team is debating two investment strategies. Str…
An executive team is debating two investment strategies. Strategy A offers a 90% chance of gaining $8 million but a 10% chance of losing $3 million. Strategy B offers an 90% chance of gaining $4 million, but a 10% chance of merely breaking even. According to prospect theory, the team is likely to favor Strategy B, because this theory argues that people making decisions under risk are: