Loss Aversion in Riskless Choice: A Reference-Dependent Model

By Amos Tversky, Daniel Kahneman. 1991

Subfields: Cognitive Science & Psychology, Economics & Operations Research

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Citations in the corpus

Differential Privacy: An Economic Method for Choosing Epsilon (2014, background): “Risk and loss aversion: Individuals tend to be averse to risk and to losses [25]: for instance, losing a thousand dollars tends to cause individuals more pain than winning the same amount would bring them pleasure.”
Stretching the Truth: Elastic Justification and Motivated Communication of Uncertain Information (2006, background): “In fact, most decision makers attach much greater weight to losses than to equivalent monetary gains ( Tversky and Kahneman, 1991 ), and other models such as Prospect theory (Kahneman and Tversky, 1979) offer a better descriptive account of behavior.”
Bias in Favor of the Status Quo (2012, background): “People give more weight to losses than to equal gains (they are ‘‘loss averse,’’ Tversky & Kahneman, 1991).”
Trade-ins, Mental Accounting, and Product Replacement Decisions (2001, background): “Individuals are loss averse (Kahneman, Knetsch, and Tversky 1990; Tversky and Kahneman 1991) and try to minimize losses in each of the accounts, before maximizing gains.”
Regular prices and sales: Regular prices and sales (2010, unknown): “By positing a constant marginal utility from gains and a constant and larger marginal disutility from losses, this formulation captures prospect theory’s (Kahneman and Tversky 1979, Tversky and Kahneman 1991) loss aversion, but ignores prospect theory’s diminishing sensitivity.”
Service Encounters as a Sequence of Events (2004, background): “As people generally prefer gains with respect to the current adaptation level (Tversky and Kahneman 1991), the new adaptation level tends to be higher than the previous one.”
Making Descriptive Use of Prospect Theory to Improve the Prescriptive Use of Expected Utility (2001, background): “w−(1−p) does not deviate much from 1 − w+(p) for most clients (Bateman et al. 1997, Tversky and Kahneman 1991, 1992 ).”