Deutsch: Prospect-Theorie / Español: Teoría de las perspectivas / Português: Teoria da perspectiva / Français: Théorie des perspectives / Italiano: Teoria del prospetto
Prospect Theory in the psychology context refers to a behavioral economic theory that describes how people make decisions involving risk and uncertainty. Developed by Daniel Kahneman and Amos Tversky, it challenges the traditional rational model of decision-making, showing that people value potential gains and losses differently—often irrationally.
The theory is widely applied in psychology, economics, marketing, and therapy to understand human biases, especially in how individuals perceive risk, weigh outcomes, and make choices under pressure.
General Description
Prospect Theory suggests that people do not make decisions based solely on final outcomes, but on perceived gains or losses relative to a reference point—often their current state or expectations. Importantly, losses are felt more intensely than equivalent gains, a phenomenon known as loss aversion.
Key features of the theory:
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Value function: Steeper for losses than for gains, meaning people are more motivated to avoid losses than to seek gains.
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Framing effect: The way a choice is presented (as a loss or a gain) significantly affects decision outcomes.
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Probability distortion: People overestimate the impact of unlikely events and underestimate more probable ones.
In a psychological context, Prospect Theory helps explain:
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Why people stay in unhealthy situations (fear of loss outweighs potential benefits)
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Why anxiety can distort risk assessment
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Why trauma survivors may make overly cautious or impulsive decisions
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How clients react to therapeutic change or uncertainty
Understanding Prospect Theory can empower therapists and clients alike to recognize when cognitive distortions are influencing decision-making. It also provides insight into self-sabotaging behavior and risk avoidance patterns.
Recommendations
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Educate clients about loss aversion and framing effects to improve decision clarity
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Explore personal reference points—what is being compared, and why?
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Practice reframing decisions to highlight gains rather than losses
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Use journaling or decision trees to visualize risk and reward more objectively
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Work with underlying fears or past losses that shape current risk perception
Symptoms, Therapy and Healing
Possible psychological effects:
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Difficulty making decisions, especially under pressure
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Chronic indecision or overcautiousness
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Anxiety-driven risk avoidance
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Emotional distress when facing uncertain outcomes
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Regret or second-guessing based on loss overestimation
Therapeutic approaches:
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Cognitive Behavioral Therapy (CBT) to challenge irrational loss-focused thinking
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Decision coaching using structured tools (e.g., pros and cons, value clarification)
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Narrative therapy to explore personal stories around success, failure, and risk
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Mindfulness to observe fear-based reactivity without acting on it
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Trauma-informed work if past loss is driving current avoidance
Healing potential: By recognizing how biases shape decisions, individuals can move toward more balanced, thoughtful choices. Reducing the emotional weight of potential loss opens space for growth, courage, and trust in self-efficacy.
Related Terms
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Loss aversion
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Risk perception
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Framing effect
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Behavioral economics
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Decision-making biases
Summary
Prospect Theory explains how people evaluate risk, often irrationally weighting losses over gains. In psychology, it sheds light on avoidance, anxiety, and distorted decision-making. Therapeutic work can help individuals recognize these patterns and make choices rooted in clarity, not fear.
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