Final answer:
Decision biases and prospect theory are part of behavioral economics, which studies how various factors influence economic decisions.
Step-by-step explanation:
Decision biases and prospect theory fall under the class of theories known as behavioral economics. Behavioral economics examines how psychological, cognitive, emotional, cultural, and social factors affect the economic decisions of individuals and institutions and how those decisions vary from those implied by classical economic theory. The Prospect Theory, developed by Daniel Kahneman and Amos Tversky, is a notable example, proposing that people value gains and losses differently, leading to decision biases that deviate from standard economic rationality.
Decision biases refer to systematic errors in judgment and decision-making, while prospect theory explains how people evaluate and choose between alternatives when faced with potential gains or losses.