Evidence on loss aversion and the endowment effect suggests that people evaluate outcomes with respect to a reference …

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 …

Loss aversion, the fact that losses have a greater impact than gains, is a fundamental property of behavioral accounts … systematic individual difference, with some individuals more or less loss aversion, (3) it could be a property of the attribute … large sample of auto buyers using an experiment which allows us to measure loss aversion, at the individual level for …

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 …

correlated. We show that expectation-based loss aversion as in K'oszegi and Rabin (2006, 2007) provides a natural explanation for …

We analyze how loss aversion affects prevention in Köszegi and Rabin's (2007) choice-acclimating personal equilibrium … against a stochastic reference point. Loss aversion raises optimal prevention if the loss probability is below a threshold … occurrence of a loss. The status-quo bias increases the probability threshold, making the positive effect of loss aversion on …

intense debate. Two main families of models claim to solve this puzzle: habit-formation models and loss-aversion models. The … the observed data. The loss aversion model and the internal habit model could fit the observed excess return evolution …

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

This research examines capital income taxation for a loss averse investor under some acceptable in the literature … the attractive full loss offset provisions. However, risk taking can be stimulated if the investor interprets part of the … tax as a loss instead as a reduced gain. Then investor becomes risk seeking and moves away from the discomfort zone of …

This paper presents a time-continuous portfolio selection model with loss averse investors, who possess multiple … investment goal separately. We show that when loss aversion is according to the experimental findings, investors mainly invest … overall strategy also display high leverage. The same patterns is observed when loss aversion is extreme and goals are very …