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Incorporating decision-makers' risk preferences into data-driven newsvendor models and developing machine learning methods to solve the models are the challenging problems addressed in this study. To consider different distributions and decision-makers' different risk preferences for the two losses of the total cost newsvendor model, the symmetrical, the partial symmetrical and the asymmetrical CVaR criteria are introduced. The regularisation, the primal-dual approach and the kernels in support vector machines are used to transform the data-driven risk-averse newsvendor problems under the CVaR criterion into the convex quadratic programming problems with good theoretical properties. Computational experiments are conducted on a real-world dataset. The models under the partial symmetrical and the asymmetrical CVaR criteria obtained good performances, but that under the symmetrical CVaR criterion suffered the underfitting problem. Two factors including the degrees of risk aversion for the two losses in the total cost newsvendor model and the empirical errors of data-driven models affect order decisions. The degrees of risk aversion for the two losses have anti-directional effects on order quantities. The introduction of asymmetrical CVaR criterion paves a new way to reveal the effects of different risk references for different losses on order decisions, and has the potential to improve newsvendor decisions. [ABSTRACT FROM AUTHOR]

Despite extensive theorizing on the employment–crime link, little discussion has taken place on the mechanisms through which job gains and losses affect behavior. We draw on prospect theory and the loss aversion principle, which suggests people are more sensitive to losses than gains, to assess how individuals contend with transitions in employment and income. Using fixed‐effects and asymmetrical fixed‐effects models, we analyze 36 months of retrospective information for a sample of incarcerated males collected as part of the Second Nebraska Inmate Study. First, we assess whether job losses are more likely than job gains to generate financial stress and find support for the loss aversion principle. Second, we explore how people might compensate for changes in job and income status by engaging in risk‐taking behaviors (illegal earnings, gun carrying, and offending versatility). We find the positive relationship between job and income loss on the probability of reporting illegal earnings and crime versatility is stronger than the negative relationship between job and income gain and these behaviors. Financial stress, however, does not attenuate the relationship between losses and risk‐taking behaviors. We discuss the implications for theory and policy. [ABSTRACT FROM AUTHOR]

Young individuals rarely seek information about life insurance—a product that offers long-term benefits that might not motivate a desire to act now. Framing life insurance messaging as a gain in the present (e.g., "ensure your loved ones are protected today") is thought to motivate younger individuals to seek information about insurance policies. A field experiment with a large life insurance issuer and a pre-registered experiment reveal that loss aversion and temporal orientation frames influences whether individuals aged 25–49 years shop for life insurance. Specifically, the results suggest that the superiority of gain frames over loss frames requires positioning the benefits well in the future, despite the need to act now. This study thus also contextualizes the realities and practical difficulty of framing financial products in ways that might interest a potentially vulnerable population. [ABSTRACT FROM AUTHOR]

We provide evidence that classic lottery anomalies like probability weighting and loss aversion are not special phenomena of risk. They also arise (and often with equal strength) when subjects evaluate deterministic, positive monetary payments that have been disaggregated to resemble lotteries. Thus, we find, e.g., apparent probability weighting in settings without probabilities and loss aversion in settings without scope for loss. Across subjects, anomalies in these deterministic tasks strongly predict the same anomalies in lotteries. These findings suggest that much of the behavior motivating our most important behavioral theories of risk derive from complexity-driven mistakes rather than true risk preferences. (JEL C91, D44, D81, D91) [ABSTRACT FROM AUTHOR]

Opportunistic behaviors are common in public–private partnership (PPP) projects. The contractor involvement in a whole project lifecycle is essential to ensure successful project planning, delivery, and operation, namely, through whole-process engineering consulting. Grounded with prospect theory, this study developed a tripartite evolutionary model among government, social capital, and whole-process engineering consulting enterprise for their opportunistic behavior in the delivery process of PPP projects. The model analyzed the risk attitude and loss avoidance of game subjects for strategic decision-making. MATLAB simulation was employed to validate the model. The results show that the risk attitude coefficient and loss aversion coefficient significantly affect the strategy choices of game subjects including reputation loss. The stability of the PPP project regulation system depends on several factors, including the severity of government punishment, the cost of rent-seeking, and the frequency of regulatory failure. The findings contribute to the current literature of risk assessment in PPP projects as well as the development and practice of whole-process engineering consulting in PPP projects. [ABSTRACT FROM AUTHOR]

Grocery stockpiling is a common behavioral response to the emergence of disasters or heightened uncertainty. Nonetheless, the phenomenon and methods for mitigating it are not well understood. Using a model of household shopping and inventory management, we conceptualize stockpiling as a result of an increase in the fixed cost of making grocery shopping trips, or the opportunity cost of time associated with shopping. In a laboratory experiment, we find that stockpiling increases (decreases) by 78 and 41% (22%) with an increase in fixed costs and price reductions (imposition of purchase limits), respectively. We also find that stockpiling leads to fewer (more) grocery trips by 33 and 22% (36%) under the same three conditions, respectively. Our experiment and subsequent cluster analysis suggest that loss aversion suppresses stockpiling. Our experiment shows that imposing purchase limits, a common retail response to stock‐outs, can trigger stockpiling during shopping trips without purchase limits. Although we do not claim external validity, our study suggests that store managers and policymakers should be careful about solutions during a stockpiling event, such that they do not exacerbate stockpiling, which may disproportionately affect vulnerable groups and disrupt supply chains. [ABSTRACT FROM AUTHOR]

Purpose: This study constructed an information search process model based on costs and benefits to reflect different information search processes under different decisions from a behavioural economics perspective. Design/methodology/approach: This study used a deductive approach to conceptualise the costs, benefits, and uncertainties of the information search process. Subsequently, we constructed an information search process model based on the costs and benefits using graphical reasoning, loss aversion theory, bounded rationality theory, the satisficing theory of behavioural economics, and the uncertainty changes of information search process. Findings: The model revealed four types of user behaviours in the information search process: (1) avoiding search at the initiation of the search process; (2) exiting in the middle of a search; (3) stopping at the point of satisficing; and (4) continuing the search until experiencing physical discomfort. Originality/value: The model constructed in this study treats the information search as a process based on costs and benefits with uncertainty. This model integrates information search avoidance and stopping into an information search process model. The model identifies users' bounded rationality by evaluating ideal and real situations. Moreover, the model explains relative and absolute information overloads and the area beyond the user's bounded rationality. These findings could help improve users' information literacy and optimise information systems. [ABSTRACT FROM AUTHOR]

In six randomized online experiments with 2,647 medical doctors we test whether – depending on the choice architecture – physicians engaged in prescribing decisions in public organizations fall prey to systematic error (i.e. bias) and make significantly different choices when faced with the same clinical case (i.e. level noise). Results show that experts tend to make irrational choices that are influenced by outgroup bias, social comparison, past behaviour, confirmation bias, loss aversion, equivalence framing, and asymmetric dominance. We also find evidence of significant level noise, that is, between-prescriber variability, with the distribution of responses differing remarkably across experimental arms. [ABSTRACT FROM AUTHOR]

We introduce Cautious Utility, a new model based on the idea that individuals are unsure of trade‐offs between goods and apply caution. The model yields an endowment effect, even when gains and losses are treated symmetrically. Moreover, it implies either loss aversion or loss neutrality for risk, but in a way unrelated to the endowment effect, and it captures the certainty effect, providing a novel unified explanation of all three phenomena. Cautious Utility can help organize empirical evidence, including some that directly contradicts leading alternatives. [ABSTRACT FROM AUTHOR]

This study examines how investors incorporate unrealized gains or losses reported in Other Comprehensive Income (OCI) into their investment judgments. Since unrealized gains or losses can be presented in either OCI or net income—gains from trading securities are included in net income, while those from available-for-sale securities are reported in OCI (ASC 320 and ASC 851)—it raises the question of whether OCI items are perceived as equally significant as net income items. To explore this, we conducted a 2 × 2 experiment with 240 individual investors, manipulating the presentation of unrealized gains or losses in either net income or OCI. Our findings reveal that unrealized gains are valued significantly lower when presented in OCI compared to net income, indicating that investors see OCI-reported gains as less relevant. However, for unrealized losses, the incorporation degree remained consistent across both presentations, reflecting a general aversion to unrealized losses regardless of how they are reported. [ABSTRACT FROM AUTHOR]

This study aims to investigate the interaction between market volatility, economic growth, and cognitive biases over the period from April 2006 to March 2024. Market volatility and economic growth are critical indicators that influence economic stability and investment behavior. Financial market volatility, defined by abrupt and erratic changes in asset values, can have a big impact on the expansion and stability of the economy. According to conventional economic theory, there should be an inverse relationship between market volatility and economic growth since high volatility can discourage investment and erode trust. Market participants' cognitive biases are a major aspect that complicates this connection. Due to our innate susceptibility to cognitive biases, including herd mentality, overconfidence, and loss aversion, humans can make poor decisions and increase market volatility. These prejudices frequently cause investors to behave erratically and irrationally, departing from reasonable expectations and causing inefficiencies in the market. Cognitive biases have the capacity to sustain feedback loops, which heighten market turbulence and may hinder economic expansion. Similarly, cognitive biases have the potential to cause investors to misread economic indicators or ignore important details, which would increase volatility. This study uses the generalized autoregressive conditional heteroskedasticity (GARCH) model on GDP growth data from the US, the UK, and India, alongside S&P 500, FTSE 100, and NIFTY 50 data sourced from Bloomberg, to examine evidence of these biases. The results show evidence of the predictive nature of market fluctuations on economic performance across the markets and highlight the substantial effects of cognitive biases on market volatility, disregarding economic fundamentals and growth, emphasizing the necessity of considering psychological factors in financial market analyses and developing strategies to mitigate their adverse effects. [ABSTRACT FROM AUTHOR]

Problem definition: Despite extensive research on buyback contracts in supply chain management, little attention has been given to a direct comparison between a traditional full-quantity, partial-credit (FQ) buyback contract and an alternative full-credit, partial-quantity (FC) contract, especially when considering the behavioral biases of the retailer. This study aims to fill this research gap by exploring how these biases influence contract performance and offer practical guidelines for suppliers. Methodology/results: Through controlled laboratory experiments and structural model estimation, we show that the ordering decisions made by human retailers are jointly affected by three behavioral biases—loss aversion, prospective accounting, and psychological cost of inventory error—and these biases differ in magnitude between the two contracts. Incorporating these biases into a behavioral retailer's utility function, we then analytically examine which buyback policy the supplier should choose. When the wholesale price is exogenously given, the supplier should adopt the FC contract for high-margin (low-cost) products. Conversely, when the supplier has the power to set both the wholesale and buyback prices, the FC contract is generally more beneficial for low-margin products. Finally, when the product cost is sufficiently high, a wholesale price contract may be advantageous over buyback policies. Managerial implications: The managerial implication of this paper is significant for suppliers who have to choose between different buyback policies. The paper suggests that the supplier should carefully consider not just the economic, but also the behavioral dimensions when making contract decisions, particularly when dealing with a retailer influenced by behavioral biases. Specifically, the choice between FQ and FC contracts is influenced by two key environmental factors: the production cost of the product and the nature of wholesale pricing. Understanding these elements allows suppliers to be flexible in contract choices and design appropriate return policies for their downstream supply chain partners. Funding: P. Yu was supported by the National Natural Science Foundation of China [Grants 72371038 and 72033003] and the Fundamental Research Funds for the Central Universities [Grant 2024CDJSKPT16]. T. Feng was supported by the National Natural Science Foundation of China [Grant 72131004]. Supplemental Material: The online appendix is available at https://doi.org/10.1287/msom.2023.0574. [ABSTRACT FROM AUTHOR]

In a decision-making problem where a group must select an action from risky lotteries to receive a payoff that needs to be distributed among the group members, the group's external risky choice and internal resource allocation emerge as two critical and interrelated subproblems. Individuals unconsciously exhibit social comparison behavior in many group contexts, profoundly impacting their payoff preferences. In this study, we first formulate a novel group resource allocation model and explore how the allocation equality of group resource is influenced by social comparisons. Particularly, we discuss the non-dictatorship condition under social comparison effects, which guarantees an extreme case of group resource allocation, i.e., "winner-take-all," does not appear. Subsequently, we investigate the group risky choice under the effects of social comparison. The main results show that (1) introducing social comparison effects can increase allocation equality when loss aversion is high but decrease allocation equality when loss aversion is low, and (2) the classical risk sharing rule still holds in the group under social comparison effects, but introducing social comparison effects will lead to the group being more risk averse. [ABSTRACT FROM AUTHOR]

Expected utility consensus models aim to obtain a consensus solution with the maximum utility of the group. However, decision-makers (DMs) are often bounded rational in practice and their loss aversion behaviors have an important impact on the consensus-reaching, which may lead to a deviation between the actual decision and the theoretical solution. To solve this issue, we propose a maximum perceived utility consensus model based on prospect theory (MPUCM-PT) to maximize the perceived utility of the group under a budget constraint. The individual perceived utility is measured by the prospect value, and individual adjusted opinion is taken as an endogenous reference point. To explore the influence of different consensus levels on consensus modeling, we further develop a soft MPUCM-PT based on soft consensus measure. Then, upper and lower bounds of the optimal budget are given to provide a reference for setting a reasonable budget. Finally, the proposed consensus models are verified by the case of China's Taihu Lake pollution control. Results show that, with the same level of budget, the utility satisfaction obtained by the MPUCM-PT is higher than that obtained by expected utility consensus models. Moreover, the group perceived utility based on prospect theory is also improved. [ABSTRACT FROM AUTHOR]

We study the Tullock contest model with loss aversion and endogenously formed reference points. In a contest with n possibly heterogeneous players and convex effort costs, we establish sufficient conditions for a unique Nash equilibrium in pure strategies. Subsequently, we analyze the impact of loss aversion on players' spending behavior, probability of winning, and rent dissipation. [ABSTRACT FROM AUTHOR]

Heightened sensitivity to costs during decision making consistently has been related to substance use. However, no work in this area has manipulated cost information to examine how people evaluate and compare multiple costs. Furthermore, limited work has examined how affective motivations for substance use modulate the evaluation of cost information. We administered a loss-frame variant of the Effort Expenditure for Rewards Task in a diverse community sample (N = 126). Individuals who use substances to avoid negative affect allocated comparable effort across varying likelihoods of loss and computational modeling parameters indicated that they did not systematically consider cost information, which ultimately led these individuals to exert effort when it was disadvantageous to do so. Individuals who use substances to enhance positive affect allocated effort when loss magnitudes were small, suggesting that they effectively compared costs and worked to minimize those costs. Motivations for substance use differentially relate to the comparison of costly information, ultimately influencing effective decision making. General Scientific Summary: Substance use problems are a common issue in the United States, with over 100 million people engaging in problematic use in the past year. This study suggests that people who use substances to avoid negative feelings have difficulty comparing different costs, which paradoxically lead them to work harder for costlier choices. Conversely, people who use substances to feel good effectively compare costs and work to minimize those costs. [ABSTRACT FROM AUTHOR]

The article delves into the complex relationship between promoting educational excellence and educational justice, emphasizing the need to balance the development of abilities at different levels. It suggests that decision-making in education should prioritize the instrumental value of developing abilities, with non-instrumental values as secondary considerations. The text contains a variety of academic articles and book chapters covering topics such as schooling impact on executive function, educational justice for the gifted, and the value of excellence, offering diverse perspectives on talent advancement, intelligence, and equality in education. [Extracted from the article]

Past research on decisions under risk has documented two contradictory context effects: the contrast effect, where risk preferences in "target" tasks diverge from those in previous "surrounding" tasks, and the assimilation effect that implies the opposite bias. We present four web experiments (three preregistered) that clarify the conditions determining the relative prominence of these opposing effects. Our experiments focus on choice patterns in "target" tasks where participants choose between the status quo and a risky mixed gamble with an expected value of zero. Study 1 examines the impact of surroundings that differ from the target task with respect to the expected benefit from risk‐taking. The findings reveal a strong contrast effect: Decreasing the attractiveness of risk‐taking in the surrounding tasks increased the risk‐taking rate in the target tasks from 53.2% to 79.7%. Study 2 investigates the impact of surroundings that differ in the payoff domain. The findings indicate a strong assimilation effect: Decreasing the attractiveness of risk‐taking in the surrounding tasks decreased the risk‐taking rate in the target tasks from 74.7% to 36.5%. Additionally, the results revealed unpredicted and robust reversed loss aversion patterns which Studies 3 and 4 further clarify. Our findings (1) suggest that the isolated within‐task computations assumed by leading descriptive models overlook substantial contextual considerations, (2) clarify the factors determining the impact of the contrast and assimilation effects in decisions under risk, and (3) provide a theoretical framework for making useful predictions in various scenarios. [ABSTRACT FROM AUTHOR]

Numerous studies have found that people's reservation prices for selling things they possess are roughly twice what others who don't possess those things would be willing to pay to acquire them. This finding, which behavioral economists call loss aversion, prompts an important policy question: If losses weigh twice as heavily as gains, should the cost-benefit principle be modified to recommend taking only those actions whose benefits are at least twice as large as their costs? Here, I argue that this would be misguided. Although losses do indeed loom disproportionately large, both in prospect and in the immediate aftermath of having experienced them, people generally adapt to them much more quickly and completely than they had anticipated. Once people take an action, its benefits quickly become part of their endowments, causing its perceived value to rise accordingly. But adaptation affects the costs of the action in the opposite direction. Even costs that seemed genuinely daunting in prospect are generally seen as much less so once people have had an opportunity to adapt to them. To say that loss aversion creates a powerful status-quo bias is thus descriptive but, by all indications, maladaptive. [ABSTRACT FROM AUTHOR]

Purpose: This paper aims to identify the impacts of sociodemographic covariates on behavioural biases (BB) scores; the psychometric evidence of the BB measurement instruments; and the main BB that influences the decision-making of individual investors. Design/methodology/approach: Papers were retrieved through search using keywords in ten databases. This systematic review is based on 69 peer-reviewed papers, most of which were published between 2017 and 2021. The relevance of the included papers was assessed through the analysis of statistical/psychometric methods used, and content analysis of the BB literature and its sociodemographic correlations. Findings: Overconfidence is higher in men and not related to age. There was no consensus regarding the relationship between BB and other sociodemographic variables. Most measuring instruments are ad hoc, showing ≤ 4 types of psychometric evidence and assessing ≤ 9 BB. Therefore, the findings demonstrate that there is no gold standard instrument for measuring investors' BB. Furthermore, 37 BB were cited as influencers of individual investors' decision-making and overconfidence, herding, anchoring, representativeness and loss aversion were the most prevalent. Research limitations/implications: Considering that very few systematic reviews have been published in the behavioural finance area, this paper highlights the current state-of-the-art and identifies significant gaps in the literature that can be explored by further research. Originality/value: To the best of the authors' knowledge, this is the first systematic review that analyses the psychometric properties of instruments used for individual investors BB assessment. [ABSTRACT FROM AUTHOR]

Purpose – Determining the impact of behavioral influences on the stock market has significant implications for investment analysis and portfolio management. Behavioral biases are parameters that need to be considered in investment decision-making. The purpose of this study is to inform Bangladeshi investors about behavioral biases that they may encounter when making investment decisions in the prevailing frontier environment. Design/methodology/approach – Through the chi-square test, one-way ANOVA, paired-samples t-test and descriptive analysis based on the facts collected from 281 respondents of the Dhaka Stock Exchange (DSE), the study has found that individual investors of Bangladesh often make investment decisions emotionally rather than based on theories. Findings – The result shows that risk aversion and risk perception are the two most influential emotional dimensions that impact investors' decisions. The findings are consistent with the other researchers and highlight the fact that investors hardly act according to the norms recommended in the financial theories. Research limitations/implications – The findings are grounded on a small portion of investors at DSE on some particular days, which is not sufficient to study individual investors' entire complex decision-making behavior from various angles. Many respondents were reluctant and even confused to disclose their behavioral aspects. These, along with biased and careless answers, may impede the identification of the actual scenario of the behavioral responses in decision-making that demand further study. Originality/value – The novelty of this study is unique in that it examined investors of the DSE, who are considered to be a representative in a frontier market like Bangladesh. Since this market is not very resilient, small investors need to be aware of the biases of behavioral factors to survive.

The cause-and-effect relationship between incentives and market research response rates is well documented. In general, we understand that - mediated by factors such as privacy and difficulty - the greater the compensation offered to participants, the greater propensity for task completion. However, there is little understanding of how the way in which an incentive is communicated impacts results. We believe studying this field will help insight industry practitioners who are often challenged by limited or fixed incentive budgets. By exploring and ranking framing methods, we aim to recommend to researchers the tactical options that will maximise return on investment. In this initial exploration, we have narrowed framing choices to a set identified by the field of behavioural economics. In particular, we investigate the relative impact of: (1) financial incentives, (2) the endowment effect, (3) social proof, (4) altruism and, (5) financial incentives plus loss aversion. These conditions can be considered to broadly fit within one of three categories: (a) financial incentives alone, (b) behavioural principles alone, (c) financial incentives plus behavioural principles. To replicate the real-world challenges of insight professionals, this was tested in an experimental design that sought to recruit existing Aegon customers into a new research panel. The experimental case study format also lends itself to high volumes. The results of this study are based on 91,289 recruitment emails delivered to Aegon customers across various weekday mornings. Each email contained either neutral information regarding the incentive to join - the opportunity to win up to £250 - or the same message framed using one of the experimental methods in test. Messages were repeated both in the subject line and the email body. Results were measured and analysed at the points of: (A) email open, (B) email click, (C) conversion as defined by screener completion, (D) conversion as defined by panel account created, and (E) engagement as defined by completing at least one task on the panel eligible for a point reward within 3 months of signup. Additionally, the unsubscribe rate was measured and compared across all messages. Prior to the launch of the study, our hypotheses were that email communications which utitlised the endowment effect, social proof or altruism would lead to higher conversion rates than messages regarding incentivisation. Further, we hypothesised that emails which utilised both financial incentives plus loss aversion framing in an additive capacity would deliver the highest conversion rate. Our analysis led to a rejection of all hypotheses. Ultimately, it was concluded that none of the tested framing effects performed significantly better, as per chi-squared tests, than the financial incentive group across open rate, click rate, conversion rate or engagement rate. However, the addition of loss aversion performed on par with the incentive only group for panel engagement. Further, the use of loss aversion, altruism and the endowment effect all led to significantly lower unsubscribe rates than the incentive only group. This led to a nuanced conclusion which surmised that the loss aversion tactic, when used in an additive capacity to a financial incentive, appears to offer the most balanced risk profile for research professionals, whilst the endowment effect, social proof and altruism offer moderate to worse risk profiles. Finally, we highlight the need for more proof in this field - suggesting that future efforts replicate the study with a general population sample or non-financial services case studies. [ABSTRACT FROM AUTHOR]

This article characterizes optimal social security in economies with agents who exhibit loss aversion. Two forms of loss aversion are explored. In the first, workers have a fixed retirement age and are loss averse over private savings. This motivates a more generous social security program. In the second, workers do no private savings but can choose their retirement age, exhibiting loss aversion over the foregone leisure time from delayed retirement. Social security benefits consequently rise steeper with retirement age and an earlier normal retirement age is optimal. In both cases, optimal policy is highly sensitive to the introduction of loss averse preferences. [ABSTRACT FROM AUTHOR]

Abstract Loss aversion is a psychological construct defined as a tendency to value potential losses more than gains in a situation that requires decision-making. The Loss Aversion Scale (LAS, eight items) measures an individual’s loss aversion to various situations. However, the generalization of its psychometric properties to different population groups is unknown. This study aimed to validate the LAS instrument for use among Spanish university adults. To this end, two studies were conducted: a content validity study calculating the substantive validity (N = 24) of the instrument’s translation from original English to Spanish and a study of internal structure and association (N = 766) among Spanish university men and women aged 18–35. The analyses performed for each sample indicated that the instrument had adequate validity and reliability values as a one-dimensional measure; however, items 5 and 8 had to be removed. Their scores indicated moderate-magnitude correlations with social desirability. This article debates the study’s limitations, practical implications, and future lines of research based on the results. The conclusion is that the Loss Aversion Scale instrument suits general Spanish population samples and requires probable methodological control concerning social desirability.

Cooperation amongst natural resource users is key to manage ecosystems sustainably and achieve environmental goals proposed by policy and regulations. This paper focuses on the impact that livestock farming can have on the quality of a water body and investigates farmers' willingness to cooperate to preserve water quality under two different sources of uncertainty and four different degrees of uncertainty. The first source relates to the level of water quality that must be guaranteed in a river catchment to avoid irreversible deterioration of aquatic ecosystems (threshold uncertainty, i.e. with catastrophic consequences). The second source relates to the financial losses that farmers will experience in the long run if they fail to cooperate (impact uncertainty). To this end, a lab‐in‐the‐field experiment was conducted with livestock farmers of Northern Ireland. A local public good game with threshold uncertainty was framed around an agri‐environmental scheme designed to create ungrazed buffer zones for water quality preservation. Results indicate that uncertainty generally hampers farmers' cooperation and the provision of information geared to reduce uncertainty enhances it. Impact uncertainty has a milder negative impact on cooperation than threshold uncertainty. Risk preferences and probability weighting do not influence cooperation, while loss aversion has an influence on cooperation. [ABSTRACT FROM AUTHOR]

People are psychologically predisposed to minimize their losses, even in the face of substantial gains. This predisposition, referred to as 'loss aversion', is especially present when people face uncertain outcomes. In small-scale fisheries, where fishers' decisions are influenced by monetary and non-monetary assets, exploring how loss aversion intersects with conservation efforts may offer insights into how fishers balance short-term and long-term priorities. This study assessed the variables that contribute to loss aversion of small-scale fishers when making trade-offs between two valued assets: information-sharing and catch success. We used a structured questionnaire and a hypothetical simple lottery choice task of 78 fishers across 20 fishing beaches in Jamaica. We found that fishers were marginally more loss averse when both information-sharing opportunities and catch success were threatened than when only catch success was threatened. Communication frequency and size of fishing crew contributed significantly to fishers' loss aversion in most choice sets, regardless of whether materially or non-materially valued assets were threatened. By exploring the drivers underpinning fishers' choices, we provide insights into how the consideration of these variables can support the development of fisheries conservation measures that better align with the decision priorities of fishers. [ABSTRACT FROM AUTHOR]

South African subsistence livestock farmers rely heavily on traditional mitigation and coping mechanisms to deal with the effects of drought. However, these methods have proven ineffective in managing the full impact of drought. Consequently, policymakers are increasingly interested in promoting Index-based Pasture Insurance (IBPI). This paper aims to assess subsistence livestock farmers' preferences for IBPI. A simple random sampling method was used to select 110 subsistence livestock farmers for data collection. A discrete choice experiment—Conditional Logit and Latent Class models and incentivized lottery games were used to elicit preferences for insurance contracts and loss aversion. The findings indicate that subsistence livestock farmers have a favourable attitude toward IBPI contracts that protect against drought-related pasture degradation. The Conditional Logit model shows that farmers prefer transparent contracts that reimburse with feed and vouchers rather than cash. However, they derive negative marginal utility from basis risk and premium. However, the Latent Class model reveals heterogeneous preferences for IBPI among farmers. Farmers are also loss-averse, but loss aversion did not influence their preference for IBPI. Therefore, the primary recommendation for insurance providers is to consider customizing IBPI attributes to increase adoption among subsistence farmers. [ABSTRACT FROM AUTHOR]

In financial markets, irrational behaviors such as hyperbolic discounting and panic selling are prevalent. However, their widespread empirical associations remain unexplored. Numerous behavioral theories discuss how cognitive biases exacerbate panic selling through the lens of immediate loss aversion, a phenomenon in which individuals exhibit impulsive decision-making tendencies due to an intense fear of financial loss during market upheaval. Despite the theoretical elucidation, empirical investigations of these dynamics are lacking. Using a robust dataset comprising 121,293 active investors sourced from a collaborative effort between Hiroshima University and Rakuten Securities Inc., this study used mean comparison tests and probit regression to analyze hyperbolic discounting's role in panic selling behavior on the global COVID-19 financial crisis. The findings reveal that hyperbolic discounting plays a central role in triggering investors' impulsive panic selling behavior, which is driven primarily by fear of potential losses. Other factors that influence panic selling behavior include age, male gender, low education level, financial literacy, household income, household assets, risk aversion, and overconfidence in financial knowledge. Our study explicates the need to address cognitive biases in financial decision making during market crises through strategies such as targeted financial education, regulatory interventions against market manipulation, and the provision of professional advice to investors. [ABSTRACT FROM AUTHOR]

Highlights: What are the main findings? The reference point λ and loss averse degree k have different effects on the game equilibrium. What is the implication of the main finding? Consumer loss aversion is introduced into a Stackelberg game between NEVs and FVs. Real market data are used for simulation and validation. Compared to the development history of traditional FVs (fossil-fuel vehicles), although NEVs (new-energy vehicles) have many advantages and huge development potential, they are still in the early stages of development. The current research about NEV diffusion mainly focuses on policies, competition, and cooperation with FVs, as well as consumer-related factors, in which consumers are generally assumed as rational. In order to study the impact of irrational consumer factors on NEV diffusion, this study takes the prospect theory into consideration. Through a literature analysis, the loss-aversion factor is introduced to establish a Stackelberg game model, in which the FV market is the leader and the NEV market is the follower. A backward induction method is used to solve the optimal decision strategy of each party in the game, and the Python Sympy library is employed for calculation and simulation. The results show that as the loss-aversion reference point λ increases, the price, demand, and profit of NEVs increase, while the price, demand, and profit of FVs decrease, and their sum profit also shows a downward trend. While, as the loss-aversion degree k increases, the price, demand, and profit of NEVs decrease, while the price, demand, and profit of FVs increase, and their sum profit also shows an upward trend. [ABSTRACT FROM AUTHOR]

Individuals were found to anonymously predict positive election outcomes for their preferred candidate. Yet, there is little scientific knowledge about election predictions made in the context of same-camp political communications (i.e., partisan communications) that are presumably meant to encourage other supporters. In five studies of low-information elections and a study of hypothetical U.S. elections (n = 1889), we found that people tended to communicate favorable forecasts to others sharing their view, compared to the neutral point and to the actual election outcomes. On the other hand, negative framing reduced the positivity of forecasts in these communications to the extent that it led most participants to predict an election loss. This occurred in response to a single addressee acting discordantly and even more strongly when the election results were phrased as a drop. When both positive and negative framing options were available, this still negativity affected participants' predictions even though only a minority selected the negative framing option. Thus, people tend to make optimistic election predictions in partisan communications, but this pattern is easily manipulable given subtle changes in the forecasting prompt, either by negative framing or selectable positive and negative framing. [ABSTRACT FROM AUTHOR]

Accounting conservatism has been described as deriving from preferences for reporting errors to be in the direction of understatement rather than overstatement. We pair reporters with users (who rely on reporters' information) in a multiperiod experiment. We posit that, under misaligned incentives that motivate aggressive reporting, users view aggressive reports as reflecting exploitative intent and expect that a norm prohibiting aggressive reporting applies. We predict that users use noisy reporting errors to gauge reporters' norm compliance. We find that, ceteris paribus, users prefer not to be paired with reporters producing overstatement errors likely to reflect aggressive reporting relative to reporters producing understatement errors likely to reflect conservative reporting; alternatively, we find no such asymmetric preferences when the agents' motives are aligned. The asymmetric preferences cannot be explained by agency theory predictions of payoff maximization or loss aversion. These moral preferences provide an initial condition from which conservatism can endogenously emerge. Data Availability: Data are available from the authors upon request. JEL Classifications: B52; D81; D82; M41. [ABSTRACT FROM AUTHOR]

We develop and implement methods for determining whether introducing new securities or relaxing investment constraints improves the investment opportunity set for prospect investors. We formulate a new testing procedure for prospect spanning for two nested portfolio sets based on subsampling and linear programming. In an application, we use the prospect spanning framework to evaluate whether well-known anomalies are spanned by standard factors. We find that of the strategies considered, a few of them expand the opportunity set of the prospect type investors and thus have real economic value for them and involve absence of loss aversion. Those are the net stock issue anomaly under the FF-5 model, the momentum and net stock issue anomalies under the M-4 model, and the momentum anomaly under the q model. In-sample and out-of-sample results prove remarkably consistent in identifying genuine anomalies for prospect investors. This paper was accepted by Will Cong, finance. Supplemental Material: The data and online appendix are available at https://doi.org/10.1287/mnsc.2023.4953. [ABSTRACT FROM AUTHOR]

The paper deals with behavioural finance as a stream of finance challenging the principles of classical finance by adding psychology to the reasons that could explain observed anomalies within financial markets and which, at the same time, are caused by real human behaviour. The aim of this paper is to explore investors' behavioural, biases and their disturbances of rationality, focusing mostly on the factors of loss aversion, cultural influences, and overconfidence, and how these elements influence investment decisions. It is based on empirical data and behavioural experiments, which help to show how such biases deviate from efficient market theories; this work also tests some methods that can mitigate these negative effects, therefore providing insights on how to integrate the teaching of behavioural finance more effectively into the decision-making process of investors and experts within finance. Precisely, this work is aimed at attempting to provide a model of psychological behaviour for Moroccan investors, based on an investigation carried out in the field among 93 regular investors in the Casablanca Stock Exchange. The main findings of the study underline how behavioural biases deviate from predictions by efficient market theories. This paper has only focused on the specific context of Moroccan investors, yet giving insight into how psychological factors impact investment decisions through new insights into life where these financial behaviours take place. There is, hence, uniqueness to the research through the theoretical and practical approaches integrated therein, with the use of empirical data and behavioural experiments that sustain the discussion on behavioural finance. Presenting the case of Moroccan investors adds a significant contribution to proposing a context-specific model, which may bring important implications for financial decision-making within the region. [ABSTRACT FROM AUTHOR]

Introduction: Previous empirical research in the social sciences suggests sizable differences across religious denominations for various outcomes of interest, such as educational attainment, marital stability, wealth, or fertility. A small body of previous experimental literature has investigated possible differences in economic preference parameters (including time preference and risk attitude) between religious denominations that might explain those differences. Methods: This research adds to the extant literature on religion and preferences by including information on subjects' Big Five personality traits and analyzing potential correlations with loss aversion. It combines experimental data from incentivized choices with information on religious affiliation during high school and Big Five personality traits to test for possible correlations of religious denomination with risk attitude, time preference, and loss aversion, using Bayesian analysis of variance (ANOVA) and Bayesian regression analysis. Results: Bayesian ANOVA results suggest no preference differences between the religions analyzed in this research. When controlling for Big Five personality traits and a host of other background variables, Bayesian regression results suggest no effects of either religious affiliation or Big Five personality traits measures on the three economic preference parameters analyzed here. Discussion: These findings highlight the complexity of the relationship between religion, personality traits, and economic preference parameters, suggesting that previously observed differences may be influenced by the preference measures used or other unobserved factors. [ABSTRACT FROM AUTHOR]

In this article, we explore the phenomenon of loss aversion within the domain of behavioral economics, emphasizing the different perceptions individuals hold toward losses and gains. Loss aversion, a concept present in psychological literature, delineates why individuals manifest more intense emotional and psychological responses to losses than to gains of similar magnitude. By integrating contemporary research and empirical evidence, this study utilizes thematic analysis and narrative review to investigate the cognitive and affective processes that underlie loss aversion. This approach provides a theoretical understanding of how these processes affect decision-making and behavioral patterns. Furthermore, the study investigates the behavioral manifestations associated with both positive and negative outcomes within the context of loss aversion. This narrative review not only enhances our comprehension of human decision-making mechanisms but also presents insights with implications for both theoretical frameworks and practical interventions. [ABSTRACT FROM AUTHOR]

Understanding how objective quantities are translated into subjective evaluations has long been of interest to social scientists, medical professionals, and policymakers with an interest in how people process and act on quantitative information. The theory of decision by sampling proposes a comparative procedure: Values seem larger or smaller based on how they rank in a comparison set, the decision sample. But what values are included in this decision sample? We identify and test four mechanistic accounts, each suggesting that how previously encountered attribute values are processed determines whether they linger in the sample to guide the subjective interpretation, and thus the influence, of newly encountered values. Testing our ideas through studies of loss aversion, delay discounting, and vaccine hesitancy, we find strongest support for one account: Quantities need to be subjectively evaluated—rather than merely encountered—for them to enter the decision sample, alter the subjective interpretation of other values, and then guide decision making. Discussion focuses on how the present findings inform understanding of the nature of the decision sample and identify new research directions for the longstanding question of how comparison standards influence decision making. [ABSTRACT FROM AUTHOR]

This paper examines the predictions of expectations-based reference-dependent models for risk-apportionment tasks that elicit higher-order risk attitudes. We consider some of the most commonly used specifications of Kőszegi and Rabin (2006, 2007) and disappointment aversion models. Our analysis reveals that higher order risky choices exhibited by decision makers defined by those model specifications depend on whether risks to be apportioned in these tasks are symmetric or asymmetric, whether they include small probability outcomes, and on the level of loss aversion. We highlight that some of the predicted choice behaviour in the risk-apportionment tasks differs from the ones in alternative models of decision under risk. We employ experimental data to examine whether choice patterns in the risk apportionment tasks are in line with the predictions of the model specifications described here. We find that only a small proportion of them are consistent with those predictions. [ABSTRACT FROM AUTHOR]

The status-quo bias (SQB) is the tendency to stick with the current situation despite potential dissatisfaction. In this study, we explore the relationship between SQB and subjective well-being (SWB). We hypothesized that higher SQB may lead to less desirable situations (e.g., unsatisfactory marriage, unwanted job), negatively affecting SWB. We developed and examined a novel index for measuring SQB. Surveying 1,423 Israeli working adults, the index showed strong internal consistency and validity, affirming reliability and construct validity. A significant negative correlation between SQB and three SWB measures was found, with SQB explaining more to SWB variations than subjective health, income, and religion combined. Positive life changes over the past three years have moderated this relationship. Moreover, despite including factors like regret, present bias, loss aversion, and optimism—which correlate with SWB and SQB in opposite directions and, therefore, could nullify our findings—the SQB-SWB correlation remained robust. Furthermore, our SQB measure significantly predicted SWB even when controlling for the negative relationship between the affective component of SWB (i.e., emotions) and SQB, which was demonstrated to operate in reverse causality compared to our hypothesis. In other words, SQB was found to mediate between the affective component and the other components of SWB. By providing evidence of the correlation between SQB and SWB, we introduce a robust SQB measurement tool, and underscore SQB's importance when exploring SWB determinants, suggesting that policy interventions encouraging individuals to overcome barriers to change could be advantageous. [ABSTRACT FROM AUTHOR]

This document is a collection of abstracts from various presentations and studies on team communication and collaboration, highlighting the importance of effective communication in team dynamics and its impact on team performance and mental health. The abstracts cover topics such as mapping communication in teams, team coaching's impact on mental health, creating psychologically healthy veterinary teams, effective communication in cybersecurity, and the characteristics of high-performing teams. The studies emphasize the need for strategies to enhance team communication and collaboration in different fields. Another study examines the influence of parenting behavior on entrepreneurial intentions, suggesting that parenting behavior affects individuals' self-compassion, fear of failure, and willingness to start a business. The study proposes that self-compassion interventions can improve self-compassion levels, reduce fear of failure, and enhance entrepreneurial intentions. Additionally, a study explores the relationship between system justification beliefs and perceived income inequality across 40 societies, finding that stronger beliefs in meritocracy and equality of opportunities are associated with perceiving income inequality as less severe. Cultural orientations and economic development levels were found to moderate this relationship. Lastly, a study investigates the impact of top-management communication on organizational productivity, identifying various distortion styles in interpretations of organizational reality. These distortion styles can lead to moral disengagement, guilt, and closed-mindedness within organizations. [Extracted from the article]

Summary: The traces of marks left by human bodies on surviving archaeological artefacts can be a rich and informative source for understanding everyday individuals and their practices in the past. Nevertheless, such traces have tended to be neglected or generalized in archaeology, in favour of elite artefacts and manufacturing statistics – or in pursuit of 'clean', forensically amenable evidence, e.g. dry fingerprints. Using two case studies from Bronze Age Crete, this paper calls for an attitudinal, as much as a methodological, shift in how we exploit the remnants of gestural preferences, limitations and mistakes which we have hitherto chosen to dismiss. I argue that, if we want to understand nameless individuals of past societies, we need to overcome our implicit aversion to the mundane and everyday and to find new ways of exploring the 'messy', inconvenient, but also abundant fleeting moments of bodies no longer extant. [ABSTRACT FROM AUTHOR]

This study evaluates details of a progressive transportation development model, wherein high occupancy vehicle (HOV) lanes are transformed into high-occupancy toll (HOT) lanes. Although the management strategy of HOT lanes has been implemented for many years, the implementation of HOT lanes is limited in many regions, and thus, many people remain unfamiliar with the concept. This study aims to evaluate travelers' willingness to pay for HOT lanes based on a "low application" scenario in Shenzhen, China, wherein some HOV lanes are present and may potentially be transformed into HOT lanes, but not all area residents are aware of their intended purpose. According to the Diffusion of Innovation Theory, we leverage this situation to conduct a survey of perceptions and attitudes toward the HOT lanes and evaluate how these perspectives may translate to HOT lane utilization. We further proposed a hybrid utility and regret model considering the impacts of loss aversion caused by tolls or coordinated carpooling for single occupancy vehicles to explore relationships between travel behavior and surveyed demographic and socio-economic characteristics in the context of HOT lanes in places where they are unfamiliar. A sensitivity analysis is conducted to characterize any apparent changing influences. The results show that the model considering decision regret performs well, especially in the scenario with low tolls. Nearly 80% of travelers are willing to pay tolls for HOT lanes, even with limited prior exposure to the concept. The increased acceptance of HOT lanes can be expected to hurt total toll revenue, which may be triggered by easier access to carpool partners associated with the free pass. The study informs a deeper understanding of travelers' willingness to pay for HOT lanes and helps policy-makers develop differentiated tolling strategies. • The willingness to pay for HOT lanes is studied under the low application. • Loss due to unfamiliarity is integrated with the analysis of willingness to pay. • The willingness to pay supports differentiated spatiotemporal tolling policies. • Nearly 80% of travelers are willing to pay tolls, even with the limited concept. • Reduced travel time has the most significant impact on the HOT lane advantage. [ABSTRACT FROM AUTHOR]

Utilizing a national individual‐level medical dataset and the home bias phenomenon in investment, our study shows a strong and robust link between declines in local stock returns and increased antidepressant consumption among investors. This effect intensifies in areas with higher per capita dividend income, suggesting a direct relationship between higher stock ownership and stronger responses. We confirm that portfolio losses, not local economic conditions, are responsible for increased antidepressant usage during market downturns. Using the frequency of psychotherapy sessions yields similar findings. Moreover, our study supports the loss aversion hypothesis as we find positive stock returns do not influence antidepressant usage. [ABSTRACT FROM AUTHOR]

This study formulates a theoretical framework to shed light on why cash grants fail to increase parental investment in child education, and what can be done to address the issue. The paper asserts that consumption vulnerability, loss aversion, and information friction render lump‐sum cash grants ineffective. Redesigning interventions as demand‐side cost‐sharing schemes would nudge parents to buy educational materials for their children. [ABSTRACT FROM AUTHOR]

This study explores the complex interplay between extrinsic and intrinsic factors influencing human behavior in various contexts, including the stock market, with a focus on the impact of cognitive and emotional biases on investment decisions. Against the backdrop of modern finance theories, which assume market efficiency and rational investor decision-making, this research aims to investigate the effects of overconfidence, loss aversion, and herd behavior on investor choices. Utilizing a mixed-methods approach, combining theoretical frameworks from prospect theory and behavioral finance, this study examines the ways in which these biases lead to suboptimal decisions, undermine market efficiency, and contribute to market trends and anomalies, including momentum effects and bubbles. The key findings of this research reveal that cognitive and emotional biases significantly impact investment decisions, and that understanding and regulating these biases can improve market predictions and regulation. The study's policy and business implications are significant, as its insights can inform the development of more effective investor education programs, risk management strategies, and regulatory frameworks, ultimately leading to more informed decision-making and stable financial markets. [ABSTRACT FROM AUTHOR]

This research paper examines the behavioral factors influencing investment choices among salaried individuals in Mumbai. By identifying key psychological biases and preferences, this study aims to provide insights into the decision-making processes of investors. The findings can help financial advisors and policymakers develop strategies to enhance investment outcomes for salaried employees. [ABSTRACT FROM AUTHOR]