Risk Preferences and Behavioral Biases in Individual Financial Decision-Making: Evidence from Brazil

• Prospect Theory biases persist in Brazilian financial decision-making • Loss aversion remains dominant across risk and uncertainty scenarios • Education and experience increase tolerance for probabilistic outcomes • Logistic models reveal demographic heterogeneity in risk preferences • Findings inform financial education and policy in emerging markets This study revisits the core predictions of Prospect Theory in the context of individual financial decision-making in Brazil, an important emerging-market setting. Using structured decision problems adapted from Kahneman and Tversky’s (1979) original experiments, the study examines whether classic behavioral patterns, especially the certainty effect and loss-related asymmetry, remain visible in a contemporary sample. The instrument was translated and culturally adapted to the Brazilian context, and data were collected online in 2024 from 122 respondents. The empirical strategy combines descriptive comparisons with the original 1979 benchmarks and scenario-specific binary logistic regressions using education, age, gender, and investment ownership as explanatory variables. The results indicate that the main behavioral regularities predicted by Prospect Theory remain empirically relevant, although their intensity varies across decision problems. The multivariate evidence further shows that demographic characteristics do not operate as universal determinants of behavior. Instead, their effects are selective and context-dependent, with age, education, gender, and investment ownership becoming significant only in particular scenarios. The study contributes to the literature on household finance and behavioral decision-making by providing updated evidence from a contemporary Brazilian sample and by showing that Prospect Theory remains useful for understanding financial choices in emerging-market contexts. The findings should be interpreted as evidence of persistence with heterogeneity within the observed sample, rather than as population-wide estimates of Brazilian investor behavior.