Prospect Theory (1979) and Theory of Planned Behaviour (1991) are so old how it is relevant in 2025

 The comment that these theories—Prospect Theory (1979) and Theory of Planned Behavior (1991)—are “so old” misunderstands how theoretical frameworks function in academic and applied research.

Here's how you can justify their relevance in 2025:

✅ 1. Enduring Validity & Global Recognition

  • Prospect Theory (Kahneman & Tversky, 1979) remains one of the most cited behavioral economic theories. Kahneman won the Nobel Prize in Economics in 2002 because of this theory.

  • Theory of Planned Behavior is still widely used across fields like marketing, psychology, consumer finance, and public health, especially in modeling behavioral intentions.

Example of current relevance:

  • Studies as recent as 2023–2025 in journals like Journal of Behavioral Finance and Journal of Financial Planning continue to use both theories to analyze risk aversion, fintech adoption, and post-pandemic investor psychology.

✅ 2. Ability to Explain Present-Day Phenomena

  • Prospect Theory explains why investors might still avoid equities or crypto despite potential for high returns—it highlights loss aversion, which was heightened post-COVID.

  • TPB explains how digital literacy, peer influence, and confidence in fintech platforms (like Zerodha, Groww, or Paytm Money) affect investment behavior.

So, these theories help interpret:

  • Preference for safe assets like FDs/gold

  • Behavioral shift to online investing

  • Generational differences in risk tolerance

✅ 3. Modern Applications & Integrations

  • In 2025, researchers extend these theories with newer constructs like:

    • Perceived risk in digital environments

    • Trust in technology

    • Financial anxiety post-COVID

    • Behavioral nudges in app-based investing

Thus, the age of a theory does not diminish its relevance, if its core principles explain current behavior and can be extended or contextualized.

📌 Suggested Rebuttal Sentence for Your Paper or Viva:

"Although Prospect Theory (1979) and TPB (1991) are established frameworks, they offer timeless insights into decision-making under risk and intention formation, which are highly relevant in understanding modern investment behavior—especially in contexts like post-COVID uncertainty and digital finance adoption in 2025."


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