Prospect Theory, developed by Daniel Kahneman and Amos Tversky, revolutionised our understanding of human decision-making by showing that people do not evaluate outcomes purely on logic or absolute value, but rather on perceived gains and losses relative to a
reference point. Most strikingly, it reveals that losses loom larger than equivalent gains so that losing $100 feels far more painful than the joy of gaining $100. This insight, known as loss aversion, illuminates why people often avoid risks, cling to what they have, or make choices that appear “irrational” by classical economic standards. Yet far from being a flaw, this tendency reflects deep psychological realities that can be harnessed to improve health and wellbeing: framing health advice in terms of potential losses (e.g., the risks of smoking or inactivity) can be more motivating than highlighting gains, while understanding loss aversion can help design better interventions for mental resilience, financial stability, and healthier habits. In this way, Prospect Theory not only reshaped economics but also gave us powerful tools to guide human flourishing. In relation to spirituality, losing health and happiness through separation from God can seem more painful than the joy of experiencing eternal love and peace in relationship with Him.