In marketing, there has been extensive empirical research to ascertain whether there is evidence of loss aversion as predicted by several reference price preferences theories. Most of that literature nds that there is indeed evidence of loss aversion for many di erent goods. I argue that it is possible that some of that evidence seemingly supporting loss aversion arises because price endogeneit...

The literature discusses risk aversion as one of the behavioral determinants of technology adoption. However, little attention has been paid to measuring ambiguity aversion of poor people in developing countries or in finding the role of ambiguity aversion in technology adoption. Risk experiments in the previous studies have been designed in such a way that individuals face the risky and/or amb...

Loss-averse behavior makes the newsvendors avoid the losses more than seeking the probable gains as the losses have more psychological impact on the newsvendor than the gains. In economics and decision theory, the classical newsvendor models treat losses and gains equally likely, by disregarding the expected utility when the newsvendor is loss-averse. Moreover, the use of unbounded utility to m...

Bargaining problems are considered where the preferences of the bargainers deviate from expected utility but can be modelled according to rank dependent utility theory. Under rank dependent utility both the utility function and the probability weighting function influence the risk attitude of a decision maker. The same definition of risk aversion leads to two forms of risk aversion: utility ris...

Myopic loss aversion was suggested by Benartzi and Thaler (1995) as the main explanation for the equity premium puzzle. We investigate the impact of myopic loss aversion on actual investment decisions of 400 Dutch individual investors, covered by the Dutch National Bank Household Survey. We find that higher loss aversion is associated with a lower share of investments in risky assets. The inves...

Defined as increased sensitivity to losses, loss aversion is often conceptualized as a cognitive bias. However, findings that loss aversion has an attentional or emotional regulation component suggest that it may instead reflect differences in information processing. To distinguish these alternatives, we applied the drift-diffusion model (DDM) to choice and response time (RT) data in a card gam...

Loss aversion refers to the fact that people are distinctively more sensitive to losses than to gains. Loss averse agents are very risk averse around the reference point and exhibit asymmetric responses to positive and negative income shocks. In an otherwise standard RBC model, I study loss aversion in both consumption alone and consumption-and-leisure together. My results indicate that how los...

Loss aversion is considered a general pervasive bias occurring regardless of context or person making the decision. We hypothesized that conscientiousness would predict an aversion to losses in the financial domain. We index loss aversion by the relative impact of income losses and gains on life satisfaction. In a representative German sample (N = 105,558: replicated in a British sample, N = 33...