Life and achievements
Early life
Amos Tversky was born in Haifa, Israel, in 1937 to a family with a substantial academic and political background. His father, Yosef Tversky, was a Polish-born veterinarian, while his mother, Jenia, was a social worker and a member of the Knesset. As a child, Tversky was raised in a family that encouraged the discussion of various issues, with science and mathematics always paramount. During his teenage years, Tversky attended the Hebrew Reali School in Haifa, where he displayed his academic talents.
Tversky had always been an academic, but his early years were also shaped by his military service. He enlisted in the Israel Defense Forces, where he served as a captain and was regarded as a courageous and efficient soldier. He participated in significant military events like the Suez Crisis and the Six-Day War. His experiences in the army, especially managing an army unit under stress, influenced his later ideas about decision-making, risk, and uncertainty.
After his military service, Tversky resumed his education at Hebrew University in Jerusalem, where he pursued courses in psychology and mathematics. This was when he started to develop an interest in human judgment and decision-making. He was a bright student, earning a Fulbright Scholarship, which enabled him to complete his Ph.D. in Psychology at the University of Michigan in 1965. His doctoral thesis laid the groundwork for his subsequent work on choice and heuristics in decision-making.
Legacy
Amos Tversky’s contributions are felt across psychology, economics, finance, law, and public policy. His work with Daniel Kahneman on cognitive illusions and decision-making under risk contributed to the development of the theory of behavioral economics. Their research partially rejected the neoclassical economic model of human beings as rational utility maximizers, showing that heuristics, emotions, and prejudices affect decision-making.
The most famous contribution of Tversky to behavioral economics was the concept of prospect theory, developed with Kahneman in 1979. This theory revolutionized how risk and decision-making were understood, demonstrating that people are more concerned with losses than with equivalent gains—a concept known as loss aversion. Framing was another important aspect of the theory, showing that the way options are presented can greatly influence decisions. These insights have had major implications for fields from finance to public policy, reshaping how economists and policymakers understand behavior.
Tversky’s work in psychology was also immense. He advanced the study of heuristics—rules of thumb that people use to make decisions in certain contexts, often leading to systematic mistakes. These findings are now essential in analyzing human reasoning.
Although Tversky passed away in 1996, his ideas continue to be influential. His research has been applied in various fields, including behavioral finance, where cognitive biases explain investor mistakes. His theories have also impacted policy-making, particularly through the development of nudge theory, which encourages beneficial changes by altering the context in which decisions are made. His work with Kahneman laid the groundwork for a new approach to understanding human reasoning and decision-making.
Milestone moments
Jul 16, 1969
Work with Daniel Kahneman Starts
Amos Tversky and Daniel Kahneman initiated their lifelong collaboration in 1969, which changed the face of psychology and economics for over a decade.
The first one was published in 1971 under the title ‘Belief in the Law of Small Numbers’; this paper questioned common misconceptions regarding statistical data and presented the new concept of cognitive illusions.
This partnership combined Tversky’s research on the formal analysis of decision-making with Kahenman’s work on perception to form a highly influential research alliance.
Tversky and Kahneman’s work on cognitive biases opened the path for other behavioral economists and changed their thoughts about judgment and decision-making.
This was the start of one of the most fruitful collaborations in many fields of study.
Jan 18, 1974
Publication of Judgment under Uncertainty: Heuristics and Biases
In 1974, Tversky and Kahneman published their influential paper Judgment under Uncertainty: Heuristics and Biases in Science.
It also presented the availability and representativeness heuristics, which helped the reader understand how people make decisions based on shortcuts in their minds.
This research confirmed that these heuristics cause systematic errors in decision-making, contrary to the theoretical assumption that people are rational decision-makers, especially in risky situations.
The paper became one of the most popular in psychology and contributed to the development of the new science of behavioral economics.
This milestone emphasized Tversky’s contribution to cognitive psychology and his role in developing studies on judgment and decision-making.
Feb 15, 1979
Introduction of Prospect Theory
In 1979, Tversky and Kahneman introduced prospect theory in their paper “Prospect Theory: An Analysis of Decision Under Risk,” published in the Econometrica journal.
The theory showed that people are not rational decision-makers when it comes to risk management. This is exemplified by loss aversion, whereby potential losses are more significant than potential gains.
It also introduced the concept of framing, which revealed that how choices are packaged and presented can significantly affect people’s decisions.
This revolutionary work challenged mainstream economic views, and six years after Tversky’s death, Kahneman won the Nobel Prize in 2002.
This achievement solidified Tversky’s status as one of the leading behavioral economics scholars and a major contributor to the study of decision-making under risk.
Jun 14, 1984
Awarded MacArthur Fellowship
Tversky was awarded the MacArthur Fellowship in 1984 for his outstanding work in psychology and economics.
The fellowship recognized his research on cognitive biases and decision-making, which has essential applications in explaining human behaviour in areas such as finance and policy.
Tversky’s contributions to understanding decision-making processes under risky conditions were well known.
This fellowship signified a peak in his career, marking him as a leading scholar in the behavioural sciences.