Tversky

Amos Nathan Tversky (1937–1996) was an Israeli-American cognitive psychologist whose work on judgment and decision making helped redefine both psychology and economics.

Born in 1937, Tversky studied at the Hebrew University of Jerusalem and spent much of his career in the United States, notably as a professor at Stanford University. His collaborations with Daniel Kahneman bridged psychology and economic thinking and reshaped how researchers understand choice under uncertainty.

With Kahneman, Tversky developed Prospect Theory (1979), which argues that people evaluate outcomes relative to a reference point and that losses loom larger than gains, producing loss aversion and a nonlinear value function. This work challenged traditional expected utility theory and offered a descriptive account of real-world decisions.

Tversky and Kahneman also identified heuristics—such as availability and representativeness—that people use to simplify judgment. They showed these mental shortcuts can lead to systematic biases, including framing effects and the conjunction fallacy, famously illustrated by the Linda problem.

Their 1974 Science article Judgment under Uncertainty: Heuristics and Biases and subsequent work laid the groundwork for behavioral economics and influenced decision science across disciplines. The pair demonstrated that human cognition often deviates from purely rational models, prompting a shift toward integrating psychological insights into economic theory.

Although Tversky did not receive the Nobel Prize, Kahneman has credited their collaboration as central to the field; Tversky’s death in 1996 preceded the prize awarded to Kahneman in 2002. Today, his legacy persists in theories of risk, framing, and human cognition, and in the ongoing integration of psychology into economic analysis.