a theory of decision making that attempts to explain how people’s decisions are influenced by their attitudes toward risk, uncertainty, loss, and gain. In general, it asserts that people are influenced by a systematic inability to evaluate probabilities correctly and in most cases are motivated more strongly by the fear of loss than by the prospect of making the equivalent gain. See anticipatory regret; regret theory. See also mental accounting. [formulated by Daniel Kahneman and Amos Tversky]