 Studies in experimental economics reveal that actual agents often do not conform with theoretically derived rationality criteria. One of the most popular descriptive theories that tries to capture actual behaviour under risk is prospect theory, which was developed by Daniel Kahneman and Amos Tversky around 1980 (Kahneman &amp; Tversky 1979; Tversky &amp; Kahneman 1986). It distinguishes between two stages in a decision process. In the first phase, the editing phase, gains and losses in the different options are identified. They are defined relative to some neutral reference point that is usually the current asset position. In the second phase, the evaluation phase, the options are evaluated in a way that resembles expected utility analysis, but both utilities and probabilities are replaced by other, similar measures. Utility is replaced by a measure that is asymmetrical between gains and losses. Objective probabilities are transformed by a function that gives more weight to probability differences close to the ends than to those near the centre of the distribution. Thus it makes a greater difference to decrease the probability of a negative outcome from 2 to 1 per cent than to decrease it from 51 to 50 percent. 