Prospect Theory (explained in a minutes) – Behavioral Finance

A 1995 study revealed that Olympic bronze medalists often appear happier than silver medalists. This is due to their perspective: silver medalists focus on narrowly missing gold, viewing it as a loss, while bronze medalists see their achievement as a gain compared to not winning a medal. This illustrates how people value gains and losses differently, a concept explained by prospect theory. The study underscores the importance of perspective in appreciating our successes.