Tversky's work on decision theory

Amos Tversky was a psychologist whose work significantly influenced decision theory, particularly through his research on human judgment and choices under uncertainty. He, along with Daniel Kahneman, developed prospect theory, which explains how people evaluate potential losses and gains. Unlike traditional economic theory, which assumes rational decision-making, Tversky's findings showed that individuals often rely on heuristics—mental shortcuts—that can lead to biases and irrational choices. His work revealed how emotions and cognitive biases impact decisions, enhancing our understanding of behaviors in various contexts, from finance to everyday choices.