 Prospect theory incorporates these components into models of human choice under risk by first identifying a reference point that either refers to the status quo or some other aspiration level. The consequences of the options under consideration then are framed in terms of deviations from this reference point. Extreme probabilities are simplified by rounding off, which yields miscalibration of the given, exogenous probabilities. Dominance reasoning is then applied, where dominated alternatives are eliminated from choice, along with additional steps to separate options without risk, probabilities associated with a specific outcome are combined, and a version of eliminating irrelevant alternatives is applied (Kahneman &amp; Tversky 1979: 284–285).