Thinking, Fast and Slow · chapter 26 · id thinking-fast-and-slow-c26-03-people-overweight-small-probab
“People overweight small probabilities and underweight large probabilities when making decisions under risk, explaining both lottery ticket purchases and excessive insurance buying.”
holdsconfidence: high✓ ZHP-verified + red-teamed
Receipts
Kahneman & Tversky (1979), Econometrica 47(2)DOI registry: valid
The probability weighting function has an inverse-S shape: small probabilities are overweighted (explaining lottery purchases) and moderate-to-high probabilities are underweighted (explaining insurance purchases and the certainty effect).
Prelec (1998), Econometrica 66(3)DOI registry: valid
Provided an axiomatic foundation for the probability weighting function, confirming the inverse-S shape with a theoretically grounded functional form.
This claim is a stable, citable object. If you can falsify a verdict, tell us — corrections are loud here.