This paper presents an insight into the theoretical and empirical literature of Loss Aversion and Endowment Effect. The definition and conceptualisation of both ideas is introduced in order to define a framework for further analysis. Their presence implies a radical change in some of the basic standard postulates of microeconomic foundation. These concepts robustly predict a divergence between ...

We device a randomized experiment with task performance in which players directly decide as spectators/shareholders allocation criteria under ignorance or not of payoff distributions. Our main result is a strong and significant gender effect: women choose significantly more protection (that is, they choose criteria in which a part or all the total sum of money that must be allocated among parti...

The present study was designed to investigate the disadvantageous and advantageous inequity aversion of young older adults in situations which allowed them maximize or minimize payoff inequalities. Given very limited evidence regarding an actual age-related effect on aversion, purpose this examine question using economic game, “the Give-and-Take Game”, is able circumvent certain limitations Ult...

The silver lining effect predicts that segregating a small gain from a larger loss results in greater psychological value than does integrating them into a smaller loss. Using a generic prospect theory value function, we formalize this effect and derive conditions under which it should occur. We show analytically that there exists a threshold such that segregation is optimal for gains smaller t...

The paper examines optimal monetary policy delegation in an economy where wages are set strategically by a single economy-wide union whose objectives relate to employment and the real wage. Crucially, the central bank exerts imprecise control over inflation, giving rise to a positive relationship between the mean value of inflation and its variance. In this context, union concerns with regard t...

Permission to make digital or hard copies of part or all of American Economic Association publications for personal or classroom use is granted without fee provided that copies are not distributed for profit or direct commercial advantage and that copies show this notice on the first page or initial screen of a display along with the full citation, including the name of the author. Copyrights f...