the purchase is complete. I identify loss aversion as an important factor explaining the existence of vertical product … lotteries. I consider a profit-maximizing monopolist serving loss-averse consumers with rational expectations about the lottery … lottery with stochastic and lower expected quality. When consumers are reasonably loss averse, I show that the profit increase …

In this paper we study the effects that loss contracts - prepayments that can be clawbacked later - have on group … an isomorphic loss contract. Our results show that loss contracts reduce the minimum efforts of groups and worsen …