Should loss of earnings be compensated? The established law and economics wisdom considers pure economic loss as a … do not amount to a social loss and, hence, should not be compensated. We revisit these arguments and show that the social … loss should be calculated by taking into account that: (a) pure economic loss often involves impairment costs resulting …

financial decisionmaking. In this paper we present a simple model based on loss aversion that can accommodatefor all of these …

Given the possibility to modify the probability of a loss, will a profit-maximizing insurer engage in loss prevention … or is it in his interest to increase the loss probability? This paper investigates this question. First, we calculate the … expected profit maximizing loss probability within an expected utility framework. We then use Köszegi and Rabin's (2006, 2007 …

sensitivity to both gain and loss values in their decision. Further analyses show that specifically participants with higher …

default rate and loss given default of bank loans share a cyclical component, related to the business cycle. We infer this … variables. The loss distributions within the groups stay constant, but the fraction of loans with large losses increases during …