scholarly journals Loss Aversion and Consumption Plans with Stochastic Reference Points

2016 ◽  
Vol 16 (1) ◽  
pp. 303-336 ◽  
Author(s):  
Hyeon Park
Keyword(s):  
Decision Maker ◽  
Loss Aversion ◽  
Intertemporal Choice ◽  
Choice Model ◽  
State Dependence ◽  
Analytic Solutions ◽  
The State ◽  
Reference Points ◽  
State Dependent ◽  
The Individual

AbstractThis paper studies the making of risky choices following loss aversion with endogenous reference expectations under the two schemes of state-independent and state-dependent stochastic reference points. Using a tractable, intertemporal choice model, this paper derives analytic solutions to show that, when loss aversion is high, the reference-dependent decision maker saves a markedly larger amount than is predicted by the standard model. When the loss aversion is low (i.e. the individual is loss-tolerant), the overall result is ambiguous, although the decision maker may deviate into consuming more; if he faces a small level of uncertainty relative to the intensity of his loss aversion, he may even do this by borrowing. Given the same loss aversion level, this study determines that, in the presence of positive state-dependence, the state-independent model generates greater deviation than the state-dependent one. Finally, this paper derives a two-period general equilibrium result with two agents who have different attitudes toward loss.

scholarly journals Loss Aversion and Consumption Choice: Theory and Experimental Evidence

2015 ◽  
Vol 7 (2) ◽  
pp. 101-120 ◽  
Author(s):  
Heiko Karle ◽  
Georg Kirchsteiger ◽  
Martin Peitz
Keyword(s):  
Experimental Evidence ◽  
Loss Aversion ◽  
Consumer Choice ◽  
Rational Expectations ◽  
Choice Theory ◽  
Choice Model ◽  
Reference Points ◽  
Price Uncertainty ◽  
Theoretical Predictions

We analyze a consumer-choice model with price uncertainty, loss aversion, and expectation-based reference points. The implications of this model are tested in an experiment in which participants have to make a consumption choice between two sandwiches. Participants differ in their reported taste for the two sandwiches and in their degree of loss aversion, which we measure separately. We find that more-loss-averse participants are more likely to opt for the cheaper sandwich, in line with theoretical predictions. The estimates in the model with rational expectations are slightly more significant than those with naïve expectations. (JEL D11, D12, D84, M31)

State-Dependent Demand Estimation with Initial Conditions Correction

2020 ◽  
Vol 57 (5) ◽  
pp. 789-809
Author(s):  
Andrey Simonov ◽  
Jean-Pierre Dubé ◽  
Günter Hitsch ◽  
Peter Rossi
Keyword(s):  
Monte Carlo ◽  
Monte Carlo Simulations ◽  
Initial Conditions ◽  
Brand Choice ◽  
State Dependence ◽  
The State ◽  
Data Sets ◽  
True Parameter ◽  
State Dependent ◽  
Initial Conditions Problem

The authors analyze the initial conditions bias in the estimation of brand choice models with structural state dependence. Using a combination of Monte Carlo simulations and empirical case studies of shopping panels, they show that popular, simple solutions that misspecify the initial conditions are likely to lead to bias even in relatively long panel data sets. The magnitude of the bias in the state dependence parameter can be as large as a factor of 2–2.5. The authors propose a solution to the initial conditions problem that samples the initial states as auxiliary variables in a Markov chain Monte Carlo procedure. The approach assumes that the joint distribution of prices and consumer choices is in equilibrium, which is plausible for the mature consumer packaged goods products commonly used in empirical applications. In Monte Carlo simulations, the approach recovers the true parameter values even in relatively short panels. Finally, the authors propose a diagnostic tool that uses common, biased approaches to bound the values of the state dependence and construct a computationally light test for state dependence.

scholarly journals Decision making does not benefit from using a foreign language: Evidence from cognitive reflection effects on intertemporal choice.

2020 ◽  
Author(s):  
Michal Bialek ◽  
Artur Domurat ◽  
Mariola Paruzel-Czachura ◽  
Rafal Muda
Keyword(s):  
Decision Making ◽  
Foreign Language ◽  
Decision Maker ◽  
Intertemporal Choice ◽  
Reference Points ◽  
Discount Rates ◽  
Negative Effects ◽  
Cognitive Reflection ◽  
Intertemporal Choices

Intertemporal choice requires to decide between smaller sooner and larger later payoffs, and is captured by discount rates. Across two preregistered experiments we found no evidence that using a foreign language benefitted intertemporal choices. On the contrary, there was some evidence of stronger discounting when a foreign language was used. Our results confirm that more reflective individuals tend to discount less strongly, and their intertemporal choices are also more consistent across different reference points and perspectives. In turn, this allows for greater consistency in long-term planning, benefitting a decision maker. Thinking in a foreign language did not affect such consistency, and may actually have negative effects for reflective people. Finally, although our findings hint that the benefits of cognitive reflection may be reduced when using a foreign language. This raises the questions as to why and how using a foreign language helps only some individuals, and in some decisions.

scholarly journals The concept of human rights: doctrinal approaches

2020 ◽  
Vol 11 (11) ◽  
pp. 258-264
Author(s):  
Chepulchenko T. О.
Keyword(s):  
Human Rights ◽  
Natural Law ◽  
The State ◽  
Reference Points ◽  
Theory And Practice ◽  
Modern Concept ◽  
The Government ◽  
The Individual ◽  
The Right ◽  
The Relationship

The article examines the modern concept of human rights as the universally accepted system of views and attitudes about the place and role of human rights in the society and the state. The list of human rights enshrined in these international instruments and the constitutions of many countries, was the result of a long historical development of samples and standards of human life and the entire community. It is emphasized that on the basis of a combination of natural and positivistic concepts of human rights and made possible the consolidation of fundamental freedoms in the constitutions of democratic States. The article focuses on the basic concepts of how to solve the problem of human rights and legal status of the individual which have developed in the history of legal theory and practice of various peoples: liberal (European) concept of human rights, collectivist, Islamic and traditionalist concept. It is emphasized that a decisive influence on the establishment of human rights made on the liberal conception of natural law doctrine, which established the priority of human rights, the new parameters of the relationship between the individual and the government. In the statement of the rights and freedoms of man played an important role in their ideological, doctrinal justification – the doctrine of natural human rights that do not depend on the discretion and arbitrariness of the government, and it is aimed at ensuring the rights defined by nature. Based on this doctrine and on the above mentioned international legal instruments, the new Constitution of Ukraine establishes a number of new rights, which were previously unknown or Constitution of the Soviet Ukraine nor the Ukrainian legislation: the right to life, right to dignity, the right to respect for private and family life, freedom of movement and free choice of residence, right to freedom of thought and speech, free expression of views and beliefs, and so on. Therefore, a new concept of the relationship between the Ukrainian state and the person with priority to the latter is brought to life, since the category of human rights operates solely in relations between man and power. Human rights are the limits of power. They define the sphere of human activity in which the power (the state) cannot interfere and the responsibilities which the state has for the human being. The article also discusses four generations of human rights, it is noted that in the XXI century. we can talk about the formation of the fourth generation of human rights, which is connected with the scientific discoveries in the field of microbiology, medicine, genetics and more. It is this generation that is at the center of intense debate precisely in terms of the naturalness of these phenomena and processes, from the standpoint of morality and worldview of a particular society, as well as based on the content of scientific doctrine. As a conclusion, the author writes that the legally enshrined legal position of a person has as its basis a liberal and natural-law concept, which stipulated as the primary principles freedom and inalienability, inalienability of human rights that belong to it from birth. Reference points are made in the relationship between the state and man - freedom, equality, the rule of law, the universality of human rights. And on these principles, principles, in addition to the actual scope of human rights and obligations, are exercised by these rights and freedoms. Keywords: constitution, concept of human rights, international legal act, human rights, natural law.

ENSO Complexity Induced by State Dependence of Westerly Wind Events

2017 ◽  
Vol 30 (9) ◽  
pp. 3401-3420 ◽  
Author(s):  
Michiya Hayashi ◽  
Masahiro Watanabe
Keyword(s):  
El Niño ◽  
El Nino ◽  
State Dependence ◽  
The State ◽  
Stochastic Noise ◽  
Westerly Wind ◽  
Central Pacific ◽  
State Dependent ◽  
Wind Events ◽  
Westerly Wind Events

Coupled dynamics between westerly wind events (WWEs) and the El Niño–Southern Oscillation (ENSO) is examined using an atmosphere–ocean coupled model with intermediate complexity. The model incorporates state-dependent stochastic noise that mimics observed WWEs, which occur at the edge of the Pacific warm pool when the Niño-4 sea surface temperature (SST) anomaly increases positively. The model parameter that controls the efficiency of the thermocline feedback, γ, is perturbed to elaborate the sensitivity of the results to the system’s stability. Without the noise (experiment NO), the model produces an ENSO-like regular oscillation with a 6-yr period, the variance of which increases with γ. When additive noise is introduced over the western Pacific (experiment AD), the oscillations become irregular with a dominant period of 4–6 years and the increase in the variance relative to the NO experiment depends on γ. When state-dependent noise is included (experiment SD), the oscillatory solution is also irregular, and its variance and asymmetry are increased irrespective of the value of γ. Both the additive and state-dependent noise contribute to the occurrence of two types of variability, corresponding to the eastern Pacific (EP) and central Pacific (CP) El Niños. In SD, the state dependence of the stochastic noise guarantees the existence of CP El Niño regardless of γ since the increased likelihood of WWE occurrence with Niño-4 SSTs results in a positive feedback in the central Pacific. The above results suggest that the state dependence of WWEs plays a crucial role in the asymmetry and diversity of ENSO.

Utility Estimation of a Set of States of Health

1977 ◽  
Vol 16 (03) ◽  
pp. 168-175 ◽  
Author(s):  
W. I. Card ◽  
M. Rusinkiewicz ◽  
C. I. Phillips
Keyword(s):  
Visual Acuity ◽  
Utility Function ◽  
Decision Maker ◽  
The State ◽  
Decision Makers ◽  
Individual Decision ◽  
Middle State ◽  
The Individual ◽  
Utility Estimation

A decision maker was presented with three states of health, such that an imaginary patient was in the middle state while the two other states could be described as more preferred and less preferred. The decision maker was then asked to choose the minimal odds at which he would advise an operation which would result in success, the patient moving into the more preferred state, or failure, the patient moving into the less preferred state. Eight decision makers were tested in this way and each made 24 such wagers on a set of three states chosen from a total set of eight; each of these states differed unidimen sionally only in the visual acuity of the remaining eye in the imaginary patient. If the utility of I is arbitrarily assigned to the state of perfect vision, and the utility of 0 to the state of non-perception of light, estimates of the utilities of the intervening states can then be made. The utility function for each decision maker was constructed and was found to be linear against the logarithm of the visual acuity. From this it follows that if all decision makers, e.g. ophthalmic surgeons, show such linearity, they will all choose the same odds before deciding whether to operate and these odds are independent of the utilities which the individual decision maker attaches to the different states of health.

Utility Estimation of a Set of States of Health

1977 ◽  
Vol 16 (03) ◽  
pp. 168-175
Author(s):  
W. I. Card ◽  
M. Rusinkiewicz ◽  
C. I. Phillips
Keyword(s):  
Visual Acuity ◽  
Utility Function ◽  
Decision Maker ◽  
The State ◽  
Decision Makers ◽  
Individual Decision ◽  
Middle State ◽  
The Individual ◽  
Utility Estimation

A decision maker was presented with three states of health, such that an imaginary patient was in the middle state «‘hile the two other states could be described as more preferred and less preferred. The decision maker was then asked to choose the minimal odds at which he would advise an operation which would result in success, the patient moving into the more preferred state, or failure, the patient moving into the less preferred state. Eight decision makers were tested in this way and each made 24 such wagers on a set of three states chosen from a total set of eight; each of these states differed unidimen-sionally only in the visual acuity of the remaining eye in the imaginary patient. If the utility of 1 is arbitrarily assigned to the state of perfect vision, and the utility of 0 to the state of non-perception of light, estimates of the utilities of the intervening states can then be made. The utility function for each decision maker was constructed and was found to be linear against the logarithm of the visual acuity. From this it follows that if all decision makers, e.g. ophthalmic surgeons, show such linearity, they will all choose the same odds before deciding whether to operate and these odds are independent of the utilities which the individual decision maker attaches to the different states of health.

scholarly journals A maximum likelihood approach to combining forecasts

2021 ◽  
Vol 16 (1) ◽  
pp. 49-71
Author(s):  
Gilat Levy ◽  
Ronny Razin
Keyword(s):  
Maximum Likelihood ◽  
Decision Maker ◽  
The State ◽  
Prior Belief ◽  
Maximum Likelihood Approach ◽  
Combining Forecasts ◽  
The World ◽  
Likelihood Approach ◽  
The Individual ◽  
Derivatives Of

We model an individual who wants to learn about a state of the world. The individual has a prior belief and has data that consist of multiple forecasts about the state of the world. Our key assumption is that the decision maker identifies explanations that could have generated this data and among these focuses on those that maximize the likelihood of observing the data. The decision maker then bases her final prediction about the state on one of these maximum likelihood explanations. We show that in all the maximum likelihood explanations, moderate forecasts are just statistical derivatives of extreme ones. Therefore, the decision maker will base her final prediction only on the information conveyed in the relatively extreme forecasts. We show that this approach to combining forecasts leads to a unique prediction, and a simple and dynamically consistent way to aggregate opinions.

Doctoral Studies in Psychology in Spain

2003 ◽  
Vol 8 (1) ◽  
pp. 28-33
Author(s):  
Yolanda García Rodríguez
Keyword(s):  
Doctoral Programs ◽  
Legal Reform ◽  
The State ◽  
Teaching Program ◽  
Doctoral Studies ◽  
Public And Private ◽  
Teaching And Research ◽  
Doctoral Thesis ◽  
Critical Phase ◽  
The Individual

In Spain doctoral studies underwent a major legal reform in 1998. The new legislation has brought together the criteria, norms, rules, and study certificates in universities throughout the country, both public and private. A brief description is presented here of the planning and structuring of doctoral programs, which have two clearly differentiated periods: teaching and research. At the end of the 2-year teaching program, the individual and personal phase of preparing one's doctoral thesis commences. However, despite efforts by the state to regulate these studies and to achieve greater efficiency, critical judgment is in order as to whether the envisioned aims are being achieved, namely, that students successfully complete their doctoral studies. After this analysis, we make proposals for the future aimed mainly at the individual period during which the thesis is written, a critical phase in obtaining the doctor's degree. Not enough attention has been given to this in the existing legislation.

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