Amos Tversky and the Prospect Theory

Amos Tversky (1937-1996), Davis Brack Professor of Behavioral Sciences at Stanford University and one of the world’s most respected and influential psychologists died June 2, 1996, of metastatic melanoma, at the age of 59.

Amos Tversky was going to share the Nobel Prize in Economics given to Daniel Kahneman for the development of “Prospect Theory” in 2002. Kahneman and Tversky developed the “Prospect Theory” together but unfortunately the Nobel prizes are not given posthumously. This situation is similar to the Nobel prize in Economics given to Robert C. Merton and  Myron Scholes for a new method to determine the value of derivatives in 1997. The original ideas and techniques for the valuation of derivatives were developed by Fischer Black but he had died of cancer prior to the 1997 Nobel prize.

Tversky was a special scientist and human being. His contributions to the social sciences, economics, finance and psychology are monumental.

Daniel Kahneman mentions Amos Tversky in the first sentence of his Nobel prize acceptance speech while a picture of Amos Tversky’s is shown on the screen. Here’s the video of the speech

Prospect Theory

original paper:


Thirty Years of Prospect Theory in Economics: A Review and Assessment   by Nicholas C. Barberis

Prospect Theory (Wikipedia)

Google Scholar entries on Prospect Theory

Preference, Belief, and Similarity

There is an important book [1] by this title edited by Eldar Shafir that contains the selected writings by Amos Tversky. The chapters and papers in this book are:


  • Features of Similarity
  • Additive Similarity Trees
  • Studies of Similarity
  • Weigting Common and Distinctive Features in Perceptual and Conceptual Judgments
  • Nearest Neighbor Analysis of Psychological Spaces
  • On the Relation between Common and Distinctive Feature Models


  • Belief in the Law of Small Numbers
  • Judgment under Uncertainty: Heuristics and Biases
  • Extensional vs. Intuitive Reasoning: The Conjusction Fallacy in Probability Judgment
  • The Cold Facts about the “Hot Hand” in Basketball
  • The “Hot Hand”: Statistical Reality or Cognitive Illusion?
  • The Weighting of Evidence and the Determinants of Confidence
  • On the Evaluation of Probability Judgments: Calibration, Resolution, and Monotonicity
  • Support Theory: A Nonexistential Representation of Subjective Probability
  • On the Belief That Arthritis Pain is Related to Weather
  • Unpacking, Repacking, and Anchoring: Advances in Support Theory


  • On the Optimal Number of Alternatives at a Choice Point
  • Substitutability and Similarity in Binary Choices
  • The Intransitivity of Preferences
  • Elimination by Aspects: A Theory of Choice
  • Preference Trees
  • Prospect Theory: An Analysis of Decision under Risk
  • On the Elicitation of Preferences for Alternative Therapies
  • Rational Choice and the Framing of Decisions
  • Contrasting Rational and Psychological Analyses of Political Choice
  • Preference and Belief: Ambiguity and Competence in Choice under Uncertainty
  • Advances in Prospect Theory: Cumulative Representation of Uncertainty
  • Thinking through Uncertainty: Nonconsequential Reasoning and Choice
  • Conflict Resolution: A Cognitive Perspective
  • Weighting Risk and Uncertainty
  • Ambiguity Aversion and Comparative Ignorance
  • A Belief-Based Account of Decision under Uncertainty
  • Self-Deception and the Voter’s Illusion
  • Contingent Weighting in Judgment and Choice
  • Anomalies: Preference Reversals
  • Discrepancy between Medical Decisions for Individual Patients and for Groups
  • Loss Aversion in Riskless Choice: A Reference-Dependent Model
  • Endowment and Contrast in Judgments of Well-Being
  • Reason-Based Choice
  • Context-Depedence in Legal Decision Making


[1] Preference, Belief, and Similarity: Selected writings of Amos Tversky, Edited by Eldar Shafir, MIT Press (2004) , ISBN 0-262-20144-5


About Suresh Emre

I have worked as a physicist at the Fermi National Accelerator Laboratory and the Superconducting Super Collider Laboratory. I am a volunteer for the Renaissance Universal movement. My main goal is to inspire the reader to engage in Self-discovery and expansion of consciousness.
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