Comparative Loss Aversion: Some New Behavioral Implications
This paper proposes a new loss aversion coefficient for decision makers. Considering this loss aversion coefficient and Shalev’s (2002) perceptive utility function, we define a new version of rank-dependent expected utility theory. Our main results extend the restrictions of comparative loss aversion, and reveal the behavioral implications of comparative loss aversion. The new loss aversion coefficient is well defined as a measure of degree of loss aversion. Our main findings of comparative loss aversion can also be applied to welfare, health, insurance and other topical economic problems.
Key words: Loss aversion coefficient; Comparative loss aversion; Rank-dependent expected utility; Decision making under risk
Benartzi, S., Thaler, R.H. (1995). Myopic Loss Aversion and the Equity Premium Puzzle. Quarterly Journal of Economics, 110(1), 73-92.
Blavatskyy, P. R. (2011). Loss aversion. Economic Theory, 46, 127-148.
Bleichrodt, H., Miyamoto, J. (2003). A Characterization of Quality-Adjusted Life-Years Under Cumulative Prospect Theory. Mathematics of Operations Research, 28, 181-193.
Bowman, D., Minehart, D., Rabin, M. (1999). Loss Aversion in a Consumption-Savings Model. Journal of Economic Behavior and Organization, 38, 155-178.
Breiter, H. C., Aharon, I., Kahneman, D., Dale, A., Shizgal, P. (2001). Functional Imaging of Neural Responses to Expectancy and Experience of Monetary Gains and Losses. Neurn, 30, 619-639.
Camerer, C., Babcock, L., Loewenstein, G., Thaler, R. (1997). Labor supply of New York City cabdrivers: One Day at a Time. Quarterly Journal of Economics, 112(2), 407-441.
Chen, K., Lakshminarayanan, V., Santos, L (2006). How Basic Are Behavioral Biases? Evidence from Capuchin-Monkey Trading Behavior. Journal of Political Economy, 114(3), 517-537.
Genesove, D., Mayer, C. (2001). Loss Aversion and Seller Behavior: Evidence from the Housing Market. Quarterly Journal of Economics, 116(4), 1233-1260.
Kahneman, D., Tversky, A. (1979). Prospect Theory: An Analysis of Decision under Risk. Econometrica, 47, 263-291.
Köbberling, V., Wakker, R., 2005. An Index of Loss Aversion. Journal of Economic Theory, 122, 263-291.
Laibson, D., Zeckhauser, R. (1998). Amos Tversky and the Ascent of Behavioral Economics. Journal of Risk and Uncertainty, 16, 7-47.
Neilson, W. S. (2002). Comparative Risk Sensitivity with Reference-Dependent Preferences. Journal of Risk and Uncertainty, 24, 131-142.
Peters, H. (2012). A Preference Foundation for Constant Loss Aversion. Journal of Mathematical Economics, 48, 21-25.
Quiggin, J. (1981). Risk Perception and Risk Aversion Among Australian Farmers. Australian Journal of Agricultural Economics, 25, 160-169.
Samuelson, W. F., Zeckhauser, R. J. (1988). Status Quo Bias in Decision Making. Journal of Risk and Uncertainty, 1, 7-59.
Shalev, J. (2002). Loss Aversion Equilibrium. International Journal of Game Theory, 29, 269-287.
Tversky, A., Kahneman, D. (1992). Advances in Prospect Theory: Cumulative Representation of Uncertainty. Journal of Risk and Uncertainty, 5, 297-323.
Wakker, P., Tversky, A. (1993). An Axiomatization of Cumulative Prospect Theory. Journal of Risk and Uncertainty, 7, 147-176.
- There are currently no refbacks.
If you have already registered in Journal A and plan to submit article(s) to Journal B, please click the CATEGORIES, or JOURNALS A-Z on the right side of the "HOME".
We only use three mailboxes as follows to deal with issues about paper acceptance, payment and submission of electronic versions of our journals to databases: email@example.com; firstname.lastname@example.org; email@example.com
Copyright © Canadian Academy of Oriental and Occidental Culture
Address: 730, 77e AV, Laval, Quebec, H7V 4A8, Canada
Telephone: 1-514-558 6138