Carbajal, Juan Carlos; Ely, Jeffrey C. - In: Theoretical economics : TE ; an open access journal in … 11 (2016) 2, pp. 455-485
(type), and a gain-loss valuation that depends on deviations of purchased quality from a reference point. Following Koszegi … Rabin (2006), we consider loss-averse buyers who evaluate gains and losses in terms of changes in the consumption valuation … of the Mirrlees representation of the indirect utility to fully characterize optimal contracts for loss-averse consumers …
