Question: Consider a person with the following value function under prospect theory: v(w) = w.5 when w > 0 = -2(-w) .5 when w < 0

Consider a person with the following value function under prospect theory:
v(w) = w.5 when w > 0
= -2(-w) .5 when w < 0
a. Is this individual loss-averse? Explain.
b. Assume that this individual weights values by probabilities, instead of using a prospect theory weighting function. Which of the following prospects would be preferred?

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