Tversky & Kahneman 1992 (JRU) — cumulative prospect theory; probability weighting w(p); certainty effect

Claim: Tversky and Kahneman's 1992 paper "Advances in prospect theory: Cumulative representation of uncertainty" introduces a probability-weighting function w(p) applied to cumulative probabilities. It has an inverse-S shape: low probabilities are overweighted (why lotteries sell, why people buy flight insurance) and moderate-to-high probabilities are underweighted (the certainty effect). Median weighting curvatures: γ = 0.61 (gains), δ = 0.69 (losses). Median value-function curvature exponents: α = β = 0.88. Median λ = 2.25.

Source: Tversky, A., & Kahneman, D. (1992). Journal of Risk and Uncertainty 5(4): 297–323. https://link.springer.com/article/10.1007/BF00122574

Confidence: Verified.

For Candid: The certainty effect is operationally critical. Buyers radically over-prefer certain outcomes to merely probable ones. Marketing and custom-development pitches that traffic in probabilistic upside must anchor on the certain deliverable, not the probable outcome. A page redesign with a fixed deliverable and fixed price starts from a certain anchor; a "growth program" priced against probable lead volume sits in the underweighted-probability zone where buyers will discount the upside heavily.

Operationalized as: [[rule-lead-with-certain-deliverable-not-probable-outcome]].