Not lost in translation: Successfully replicating Prospect Theory in 19 countries

Kahneman and Tversky’s 1979 article on Prospect Theory is one of the most influential papers across all of the behavioural sciences. The study tested a series of binary financial (risky) choices, ultimately concluding that judgments formed under uncertainty deviate significantly from those presumed by expected utility theory, which was the prevailing theoretical construct at the time. In the forty years since publication, this study has had a remarkable impact on science, policy, and other real-world applications. At the same time, a number of critiques have been raised about its conclusions and subsequent constructs that were founded on it, such as loss aversion. In an era where such presumed canonical theories have increasingly drawn scrutiny for inability to replicate, we attempted a multinational study of N = 4,099 participants from 19 countries and 13 languages. The same methods and procedures were used as in the original paper, adjusting only currencies to make them relative to current values, and requiring all participants to respond to all items. Overall, we found that results replicated for 94% of the 17 choice items tested. At most, results from the 1979 study were attenuated in our findings, which is most likely due to a more robust sample. Twelve of the 13 theoretical contrasts presented by Kahneman and Tversky also replicated, with a further 89% replication rate of the total contrasts possible when separating by location, up to 100% replication in some countries. We conclude that the principles of Prospect Theory replicate beyond any reasonable thresholds, and provide a number of important insights about replications, attenuation, and implications for the study of human decision-making at population-level.