Loss aversion is a natural human tendency that exists to keep us from incurring losses. That being said, it is essential to know how to avoid loss aversion to prevent it from influencing our decisions, especially when there are potential gains to be made. There are two main strategies we ca...
Prospect TheoryRisk ToleranceDecision MakingMarketing InformationMutual FundThis study models and examines how changes in marketing information affects the degree of investor's risk aversion, and in turn, influences investor's decision-makings process under uncertainty. Under the mixed assumptions, the ...
Loss aversion, one of the assumptions underlying prospect theory (Kahneman & Tversky, 1979), implies that losses loom larger than gains. That is, the absolute subjective value of a specific loss is larger than the absolute subjective value of an equivalent gain. This assertion was originally prop...
BySiria Xiyueyao Luo|December 6th, 2022|Categories:Finance & Investing,Marketing & Consumer Behavior|Tags:behavioral finance,disposition effect,equity markets,finance,hope,investment,investor behavior,loss aversion,regret aversion Read More The Behavioral Economics of Price-Setting ...
So what do you think? Are we underestimating the emotional impact that loss aversion implies? Should we really be helping clients avoid losses more proactive, because the regret of not avoiding the loss may be greater than the regret of getting out and accidentally missing a gain?
He may have been one of the original examples of a true “girl dad”. I had stayed home for 3 months when she was born and he stayed home for 3 months. “Paternity Leave” was not a thing. He cried the day we took her to daycare and he went back to work. It broke my heart....
The above two examples indicate that the break-up occurs in the SCM since the loss-aversion behaviors of supply chain members are neglected by others. It is worthwhile noting that the United States of America withdraw from the Paris Agreement in 2020, since the Trump government argued that ...
Besides, the impacts of the retailer’s loss aversion and confidence levels on their expected utility under the optimal order quantity are investigated. Then whether the contract parameters can be set to coordinate the supply chain is analyzed, and the sufficient condition of coordination is ...
However, studies on managerial loss aversion yield conflicting findings that hinder the determination of its ultimate impact on the value generated by companies. Indeed, some view loss aversion as a human bias with significant adverse effects on corporate activities. Some examples of adverse effects ge...
It may be related to persons’ loss aversion, in which people are more averse to the same loss relative to the gain. In the relevant context of promoting pro-environmental behavior, the loss frame that emphasizes the consequences of inaction is more convincing than the gain frame that ...