Show Reference: "Choices, Values, and Frames"

Choices, Values, and Frames American Psychologist, Vol. 39, No. 4. (1 April 1984), pp. 341-350, doi:10.1037/0003-066x.39.4.341 by Daniel Kahneman, Amos Tversky
    abstract = {Discusses the cognitive and the psychophysical determinants of choice in risky and riskless contexts. The psychophysics of value induce risk aversion in the domain of gains and risk seeking in the domain of losses. The psychophysics of chance induce overweighting of sure things and of improbable events, relative to events of moderate probability. Decision problems can be described or framed in multiple ways that give rise to different preferences, contrary to the invariance criterion of rational choice. The process of mental accounting, in which people organize the outcomes of transactions, explains some anomalies of consumer behavior. In particular, the acceptability of an option can depend on whether a negative outcome is evaluated as a cost or as an uncompensated loss. The relationships between decision values and experience values and between hedonic experience and objective states are discussed. (27 ref)},
    author = {Kahneman, Daniel and Tversky, Amos},
    day = {1},
    doi = {10.1037/0003-066x.39.4.341},
    issn = {0003-066X},
    journal = {American Psychologist},
    keywords = {decision-making, probability, psychology},
    month = apr,
    number = {4},
    pages = {341--350},
    posted-at = {2014-03-14 12:51:32},
    priority = {2},
    title = {Choices, Values, and Frames},
    url = {},
    volume = {39},
    year = {1984}

See the CiteULike entry for more info, PDF links, BibTex etc.

Probabilistic value estimations (by humans) are subject to framing issues: how valuable a choice is depends on how the circumstances are presented (frames).

Probabilistic value estimations are not linear in expected value.

The value function for uncertain gains seems to be generally concave, that of uncertain losses seems to be convex.