In developing prospect theory, which of the following did behavioral economists not discover about people's reaction to goods and bads?
A. People feel equivalent losses and gains in equal measure, supporting the assumption that
consumers behave rationally.
B. People are generally loss averse, feeling losses more intensely than gains.
C. People judge good and bad outcomes relative to the status quo.
D. People experience both diminishing marginal utility from gains and diminishing marginal
disutility from losses.
Answer: A
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