{"slug":"loss-aversion-prospect-theory","name":"Loss Aversion and Prospect Theory","category":"Mental model","definition":"People evaluate outcomes relative to a reference point (not absolute wealth), weight losses ~2.25x as heavily as equivalent gains, are risk-averse in gain frames and risk-seeking in loss frames, and distort probabilities (overweighting small, underweighting large). The same physical outcome feels different depending on framing — this skill diagnoses and corrects that asymmetry.","latest_skill_md":"https://raw.githubusercontent.com/deciqAI/knowledge-skills/main/loss-aversion-prospect-theory/SKILL.md","playbook_url":"https://www.deciqai.com/skills/loss-aversion-prospect-theory?utm_source=skill&utm_medium=json-api&utm_campaign=knowledge-skills&utm_content=loss-aversion-prospect-theory","install":"npx skills add deciqAI/knowledge-skills","repo":"https://github.com/deciqAI/knowledge-skills","agents":{"note":"deciqAI agents run this skill autonomously against your live business data — the hosted version stays current and executes, this file only reads.","start_free":"https://www.deciqai.com/?utm_source=skill&utm_medium=json-api&utm_campaign=knowledge-skills&utm_content=loss-aversion-prospect-theory"}}