Prospect Theory Comprehension Questions Indicate whether the statement is true or false,and justify your answer.Be sure to cite evidence from the chapter and state any additional assumptions you may need. sitivity,and independe FALSE.Under bounded rationality,people are hindered by cognitive limi tations and as a result they do not always make decisions consistent with completeness,transitivity,and independence. 2.Loss aversion is the economics of jealousy:people value what they do not have more than what they do have. FALSE.The endowment effect claims that people valueanitem more if they have it than if they do not 3.During prospect theory's editing stage,the operation of segregation always occurs before the operation of simplification. FALSE.The order of operations varies by question as well as the actor. 4.Expected utility theory offers one possible valuation function that satisfies the pr mpletencss,transitivity and independence of preferen23 Prospect Theory Comprehension Questions Indicate whether the statement is true or false, and justify your answer. Be sure to cite evidence from the chapter and state any additional assumptions you may need. 1. Individuals who always make decisions consistent with completeness, tran￾sitivity, and independence are exhibiting bounded rationality. FALSE. Under bounded rationality, people are hindered by cognitive limi￾tations and as a result they do not always make decisions consistent with completeness, transitivity, and independence. 2. Loss aversion is the economics of jealousy: people value what they do not have more than what they do have. FALSE. The endowment effect claims that people value an item more if they have it than if they do not. 3. During prospect theory’s editing stage, the operation of segregation always occurs before the operation of simplification. FALSE. The order of operations varies by question as well as the actor. 4. Expected utility theory offers one possible valuation function that satisfies the properties of completeness, transitivity, and independence of preferences under uncertainty. 1