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Title:What is loss aversion?
Authors:Schmidt, Ulrich
Zank, Horst
Issue Date:2005
Citation:[Volume:] 30 [Issue:] 2 [Pages:] 157-167 [Journal:] Journal of risk and uncertainty : JRU [ISBN:] 0895-5646
Abstract:A behavioral definition of loss aversion is proposed and its implications for original and cumulative prospect theory are analyzed. Original prospect theory is in agreement with the new loss aversion condition, and there utility is capturing all effects of loss aversion. In cumulative prospect theory loss aversion is captured by both the weighting functions and the utility function. Further, some restrictions apply for the weighting functions involved in the latter model.
Subjects:prospect theory
loss aversion
JEL:D81
C60
Persistent Identifier of the first edition:doi:10.1007/s11166-005-6564-6
Document Type:Article
Appears in Collections:Economists Online

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