This book presents the definitive exposition of 'prospect theory', a compelling alternative to the classical utility theory of choice. Building on the 1982 volume, Judgement Under Uncertainty, this book brings together seminal papers on prospect theory from economists, decision theorists, and psychologists, including the work of the late Amos Tversky, whose contributions are collected here for the first time. While remaining within a rational choice framework, prospect theory delivers more accurate, empirically verified predictions in key test cases, as well as helping to explain many complex, real-world puzzles. In this volume, it is brought to bear on phenomena as diverse as the principles of legal compensation, the equity premium puzzle in financial markets, and the number of hours that New York cab drivers choose to drive on rainy days. Theoretically elegant and empirically robust, this volume shows how prospect theory has matured into a new science of decision making.

'I should have written you after my first reading of The Living Currency ; it was already breath-taking and I should have responded. After reading it a few more times, I know it is the best book of our times.' Letter to Pierre Klossowski from Michel Foucault, winter 1970. Living Currency is the first English translation of Klossowski's La monnaie vivante . It offers an analysis of economic production as a mechanism of psychic production of desires and is a key work from this often overlooked but wonderfully creative French thinker.