Behavioral Economics; risk and reference dependent preferences Consider the following loss-aversion model v(x-r)=(x-r)^0.8 if x0 =-2(r-x)^0.8 if x0 Using this information set, Determine the reference point of the prospect theory (reference-dependent) preference Now suppose that you wish to choose between doing nothing and a venture in which you earn R1200 with probability p_i=0.5 and lose R1000 with 1-p_i=0.5. Against this backdrop, argue if expected utility model (traditional model) and reference-dependent model (prospect theory model) predict contradicting behaviour