Wednesday, November 29, 2006
'Failure of Invariance'
Amos Tversky and Daniel Kahneman together are the architects of 'Prospect Theory'. The word Prospect was used not because it had anything to do with their ideas but because they believed that the word was catch and could immediately draw the attention of the reader. They have studied in detail the failure of invariance which refers to the inconsistent choices people make when they encounter the same set of problems in different situations. Choices though inconsistent need not necessarily have to be incorrect.