From 1979-1992, Daniel Kahneman and Amos Tversky developed a theory that changed the way in which decision making was studied. The theory, labelled as prospect theory or loss aversion theory states that when an individual faces two equal decisions, the individual tends to choose the one that provides him/her with potential gains rather than losses. An example of this could be if an individual wishes to invest in health insurance - on the one hand, the individual does not invest in it, and prays for a perfectly healthy life, but risks spending exorbitant amounts of money when the time arises. However, by investing in insurance, the individual spends a money covering for themselves, and saves the excess money spent when a health issue arises.
In this piece, prospect theory is being used as a tool to analyze and understand how it helps the furthering of the plot of two Bollywood movies – Om Shanti Om and 3 Idiots. Within these two movies, instances have been picked where characters have taken decisions that have helped move the plot forward.
1. Om Shanti Om: During the movie, the antagonist, film producer Mukesh (a fairly self-centered, profit minded individual) is faced with two decisions – to either marry Shanti, an actress in his up and coming movie, who is pregnant, and thereby ruining his career; or to continue on his career path solo and not marry Shanti at all. Therefore, working in tandem with prospect theory, Mukesh weighs out the potential gains and losses between the two decisions.
a. If Mukesh marries Shanti then he will have a family of his own however, this could possibly jeopardize his career and financial status.
b. If Mukesh does not choose to marry Shanti, he will not have a family of his own but would possibly have saved his career and kept his financial status stable.
Upon reviewing the above two options, Mukesh chooses to dispose off both Shanti as well as the movie project as one could not have happened without the other. As the theory goes, Mukesh makes the decision which would give him potential gain when the outcomes are uncertain (the outcome being how his career might turn out, marriage or no marriage). This furthers the plot as this is the turning point in the movie that comes full circle at the end.
2. 3 Idiots: In this movie, Raju Rastogi is put on trial by the Director of the University for breaking into his house in the middle of the night. The Director however is aware of the fact that Raju’s other friend Rancho was with him as well and asks that he either implicate Rancho in a letter stating that it was him who was behind the break-in that night or be expelled himself. By weighing out the potential gains and losses, Raju did not implicate Rancho, and at the same time attempted to take his own life as he did not want to deal with the consequences of being expelled. By making that decision, the plot is advanced in so far as the future of the three main characters is shaped and goes to show how once again, in accordance to prospect theory, the decision with potential gains has been made by the character in the story.
From the above examples we can see how in risky situations with uncertain outcomes, individuals tend to weigh out decisions to see which garners potential gains vs. potential losses and then choose the former. Once again, the uncertain outcomes: a. The tentative status of Mukesh’s film career; b. The tentative future of Raju if either option would be taken, lead the two characters to act in accordance with the loss aversion framework, thereby showing that prospect theory holds good even in fictional settings.
In closing, prospect theory or loss aversion theory is one of the many explanations on the process of individual decision making. The above anecdotes are two of the several instances in the history of cinema where characters have made decisions with loss aversion in mind. The fact that the theory can be displayed through fictional settings reflects strongly on the thought processes of the makers of these characters, since prospect theory is – subconsciously or otherwise – put into use.
Mihir Parekh
