Consider the following two alternatives: (i) In addition to what you currently own, you have been given

Question:

Consider the following two alternatives:

(i) In addition to what you currently own, you have been given $1000. You are now asked to choose one of these options:
50% chance to win $1000 or get $500 for sure.
(ii) In addition to what you currently own, you have been given $2000. You are now asked to choose one of these options:
50% chance to lose $1000 or lose $500 for sure.
Explain how the predictions of utility theory and prospect theory differ for these alternatives.

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