In addition to whatever you own, you have been given $1,000. You are asked to choose between:
A. A sure gain of $500.
B. A 50% chance to gain $1,000 and a 50% chance to gain nothing.
Another group of subjects was presented with a different problem:
In addition to whatever you own, you have been given $2,000. You are asked to
choose between:
A. A sure loss of $500.
B. A 50% chance to lose $1,000 and a 50% chance to lose nothing.
In the first group, 84% chose A. In the second group 69% chose B. The two problems are identical in terms of net cash to the subject, however the phrasing of the question causes the problems to be interpreted differently.
Source: Daniel Kahneman and Amos Tversky, "Prospect Theory: An Analysis of Decision Making Under Risk," Econometrica, 1979.