Loss Aversion in New Zealand Housing
In: New Zealand Economic Papers, 54(2), 1-23. doi:10.1080/00779954.2019.1631877
In: New Zealand Economic Papers, 54(2), 1-23. doi:10.1080/00779954.2019.1631877
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In: Political psychology: journal of the International Society of Political Psychology, Band 34, Heft 5, S. 649-671
ISSN: 1467-9221
This article draws upon recent findings from the field of neuroscience to explore how loss aversion affects foreign policy resolve. We theorize that U.S. policy makers are more resolute in pursuing preventive policies that seek to avoid losses than they are in pursuing promotive policies that seek to acquire new gains. To test our theory, we conduct the first large‐n analysis of foreign policy hypotheses derived from the neuroscience of loss aversion using data from 100 cases of U.S.‐initiated Section 301 trade disputes. The results provide strong support for the loss‐aversion‐based theory, revealing that American policy makers are willing to fight harder and hold out longer in trade disputes with preventive objectives than they are in cases with promotive ones. Our study demonstrates that hypotheses derived from neuroscientific findings can be tested using large‐n techniques in study of foreign policy, revealing a new avenue of inquiry within the field.
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In: Oxford Research Encyclopedia of Politics
"Prospect Theory, Loss Aversion, and Political Behavior" published on by Oxford University Press.
In: Blackwell Handbook of Judgment and Decision Making, S. 379-398
Attracting forestland owners to participate in carbon markets can be challenging for several reasons including offset price volatility, legislative uncertainties, high costs of offset project development, long contract lengths, and landowners' risk preferences. In this article, we elicit risk preferences and investigate Myopic Loss Aversion (MLA) of forestland owners using an economic experiment. The economic experiment is a betting game and we find that forestland owners exhibit MLA because they bet higher when returns from their investments are evaluated less frequently. Our results provide valuable information for developing carbon market protocols, especially in setting optimal evaluation periods of forest carbon offset projects.
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In: Political psychology: journal of the International Society of Political Psychology, Band 34, Heft 5, S. 649-671
ISSN: 0162-895X
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Working paper
In: Discussion Papers / Wissenschaftszentrum Berlin für Sozialforschung, Forschungsschwerpunkt Markt und politische Ökonomie, Abteilung Wettbewerbsfähigkeit und industrieller Wandel, Band 2004-17
"Wir analysieren das optimale Verhalten eines profitmaximierenden
Monopolisten mit stochastischen Produktionskosten, der an rationale,
verlustaverse Konsumenten verkauft. Hierzu entwickelt der Beitrag
übertragbare Techniken, die es erlauben, die Nachfrage von verlustaversen
Konsumenten herzuleiten, und bestimmt die optimale Preissetzungsstrategie
des Monopolisten. Ein Konsument empfindet einen Verlust, wenn er den von
ihm gezahlten Kaufpreis mit erwarteten niedrigeren Preisen des Monopolisten
vergleicht. Dieser Verlust reduziert die Zahlungsbereitschaft des Konsumenten
und senkt somit seine Nachfrage. Der Beitrag zeigt auf, unter welchen
Bedingungen eine Firma mit kontinuierlich verteilten Grenzkosten diesen
'Vergleichseffekt' (lokal) eliminiert, indem sie eine diskrete Preisverteilung wählt - also, eine Preisverteilung mit Preisstarrheit. Diese Preisstarrheit tritt umso
eher auf, je höher die Dichte der Kostenverteilung, je niedriger die
Nachfrageelastizität oder je größer die Kaufwahrscheinlichkeit des
Konsumenten ist. Unabhängig davon, ob die optimale Preisverteilung
Preisstarrheit aufweist oder nicht, schwächt der Monopolist diesen
Vergleichseffekt ab in dem er antizyklische Preisaufschläge verlangt. Auf der
anderen Seite führt die Kauferwartung des Konsumenten dazu, dass er einen
Verlust realisiert, wenn er das Gut nicht konsumieren kann. Eine höhere
Kauferwartung führt somit zu einer höheren Zahlungsbereitschaft des
Konsumenten. Daher kann es trotz der Tendenz zur Preisstarrheit auch
Umstände geben, unter denen eine Unternehmung mit fixen Grenzkosten
zufällige 'Sonderangebote' macht, welche die Kauferwartung des Konsumenten
erhöhen und somit mehr Nachfrage bei höheren Preisen generieren." (Autorenreferat)
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In: Risk analysis: an international journal, Band 28, Heft 4, S. 929-938
ISSN: 1539-6924
Findings from previous studies of individual decision‐making behavior predict that losses will loom larger than gains. It is less clear, however, if this loss aversion applies to the way in which individuals attribute value to the gains and losses of others, or if it is robust across a broad spectrum of policy and management decision contexts. Consistent with previous work, the results from a series of experiments reported here revealed that subjects exhibited loss aversion when evaluating their own financial gains and losses. The presence of loss aversion was also confirmed for the way in which individuals attribute value to the financial gains and losses of others. However, similar evaluations within social and environmental contexts did not exhibit loss aversion. In addition, research subjects expected that individuals who were unknown to them would significantly undervalue the subjects' own losses across all contexts. The implications of these findings for risk‐based policy and management are many. Specifically, they warrant caution when relying upon loss aversion to explain or predict the reaction of affected individuals to risk‐based decisions that involve moral or protected values. The findings also suggest that motivational biases may lead decisionmakers to assume that their attitudes and beliefs are common among those affected by a decision, while those affected may expect unfamiliar others to be unable to identify and act in accordance with shared values.
Law, Psychology, and Morality: The Role of Loss Aversion systematically analyzes the complex relationships between loss aversion and the law weaving together insights from cognitive and social psychology, neuropsychology, behavioral economics, experimental legal studies, economic analysis of law, normative ethics, moral psychology, and comparative law. It discusses diverse legal issues in private and public law, national and international law, and substantive and procedural law. Eyal Zamir provides an overview of the psychological studies of loss aversion to examine its effect on human behavior in the contexts of particular interest to the law, while discussing the impact of the law on people's behavior through the framing of the choices they encounter. The book further highlights an intriguing compatibility between loss aversion and fundamental features of the law and various legal doctrines, while theorizing about the causes of this compatibility by drawing on insights from the economic analysis of law and evolutionary psychology. The book points to the correlation between loss aversion, deontological and commonsense morality, and the law, while proposing many normative implications.