In this paper it is shown that the combination of mental accounting and loss aversion can fundamentally changes people … play of the players with loss aversion, and that the degree of the favorite-longshot bias depends on the mental accounting … process the players use. -- loss aversion ; mental accounting ; parimutuel betting ; the favorite-longshot bias …

Previous research suggests that human reaction to risky opportunities reflects two contradicting biases: "loss aversion …", and "limited level of reasoning" that leads to overconfidence. Rejection of attractive gambles is explained by loss … high rate of counterproductive betting even when limited level of reasoning and loss aversion imply no betting. The results …

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 …

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

undesirable gambling activities if times are moderately bad. Possible applications of the model include contests for status, job …