268 D KAHNEMAN AND A. TVERSKY that involve no losses. what happens when the signs of the outcomes are reversed so that gains are replaced by losses? The left-hand column of Table I displays four of the choice problems that were discussed in the pret nd the right-hand column displays choice problems in which the signs of the to denote the loss of x, and to denote the prevalent preference, i.e., the choice made by the majority of subjects. REFERENCES BETWEEN POSTTIVE AND NEGATIVE PROSPECTS Problem3:(4,000,80)<(3,00 Problem 3 Proble8:(3,000,.002)<(6,000,001). Problem8 02 In each of the four proble le I the preferen rospects is the mirror image of the cts Thu ses the preference order We label this pattern the reflection effect Let us turn now to the implications of these data. First, note that the reflection fect implies that risk aversion in the positive domain is accompanied by risk subjects in the negative domain. In Problem 3, for example the majority of ere willing to accept a risk of 80 to lose 4,000, in preference to a sure risk seeking in choices between negative prospects was noted early by Markowitz [48] reported data where dramatic shift from risk aversion to risk seeking. For example, his subjects were indifferent between(100, 65;-100,35)and(O), indicating risk aversion They rere also indifferent between(200, 80)and (100), indicating risk seeking. a recent review by Fishburn and Kochenberger [14] documents the prevalence of risk seeking in choices between negative prospe Second, recall that the preferences between the positive prospects in Table I inconsistent with expected utility theory, The preferences between the cor- responding negative prospects also violate the expectation principle in the same manner. For example, Problems 3 and 4, like Problems 3 and 4, demonstrate that outcomes which are obtained with certainty are overweighted relative to uncertain outcomes. In the positive domain, the certainty effect contributes to a risk averse preference for a sure gain over a larger gain that is merely probable. It the negative domain the same effect leads to a risk seeking preference for a loss Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.Reproduced with permission of the copyright owner. Further reproduction prohibited without permission