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 Friedman-Savage Versus Prospect Theory 
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Joined: 01 Mar 2013
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1) Friedman-Savage says a person has a risk-seeking (convex) utility function for gains and a risk-averse (concave) utility function for losses.
2) Prospect Theory says that people are risk averse when facing gains but loss averse when facing losses.
Is this accurate? They are very similar.


08 Jul 2015
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Joined: 01 Mar 2013
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edit 2) risk averse when gains, but risk-seeking when facing losses.


08 Jul 2015
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Joined: 01 Mar 2013
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I see so they are mirror images of each other. Thanks.


08 Jul 2015
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rellison wrote:
2) Prospect Theory says that people are risk averse when facing gains but loss averse when facing losses.
AKA loss aversion (quick to realize gains but hold onto losses)


08 Jul 2015
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