The results generated by experimentalists in psychology and economics haveled to numerous advances in the study of human decision making under risk.Camerer (1995) and Rabin (1998) provide excellent reviews of the relevantliterature. These results clearly display the gap between normative theoriesof ideal behavior and descriptive theories of observed behavior. The mostprominent result is loss aversion – the observation that a loss is given greatervalue than a gain of an equal size – and the resulting S-shaped utility function.