Prospect Theory

Your constantly-updated definition of Prospect Theory and collection of videos and articles

What is Prospect Theory?

In economic theory it was once considered that all economic decisions were made on a rational basis based on choice between two (or sometimes more) economic values. However, behavioral economics has discovered that in fact that people generally do not behave rationally and that they may make poor economic decisions on value because of this. Prospect theory describes the way people choose between different value outcomes when there is a measure of risk involved in those outcomes.

Literature on Prospect Theory

Here’s the entire UX literature on Prospect Theory by the Interaction Design Foundation, collated in one place:

Learn more about Prospect Theory

Take a deep dive into Prospect Theory with our course Get Your Product Used: Adoption and Appropriation .

Designing for user experience and usability is not enough. If products are not used—and it doesn’t matter how good they are—they will be consigned to the trash can of history.

Sony’s Betamax, Coca-Cola’s New Coke, Pepsi’s Crystal Pepsi, and McDonald’s Arch Deluxe are among the most famous products which made it into production but failed to wow their audiences, according to Business Insider. In fact, Harvard Business Review dedicated a long piece to “Why most product launches fail”—so it’s not just big brands that aren’t getting their design process right but a lot of businesses and individuals, too.

So, what is the way forward? Well, once you’re sure that the user experience and usability of your product work the way you want them to, you’ve got to get your designs adopted by users (i.e., they have to start using them). Ideally, you want them to appropriate your designs, too; you want the users to start using your designs in ways you didn’t intend or foresee. How do we get our designs adopted and appropriated? We design for adoption and appropriation.

This course is presented by Alan Dix, a former professor at Lancaster University in the UK and a world-renowned authority in Human-Computer Interaction. Alan is also the author the university-level textbook “Human-Computer Interaction.” It is a short course designed to help you master the concepts and practice of designing for adoption and appropriation. It contains all the basics to get you started on this path and the practical tips to implement the ideas. Alan blends theory and practice to ensure you get to grips with these essential design processes.

All open-source articles on Prospect Theory

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