Loss Aversion in the Housing Market: A New Paradigm

2017 ◽  
Author(s):  
Zhaohui Li ◽  
Michael Joseph Seiler ◽  
Hua Sun
Keyword(s):  
Housing Market ◽  
Loss Aversion ◽  
New Paradigm

scholarly journals Risk as Challenge: A Dual System Stochastic Model for Binary Choice Behavior

2019 ◽  
Author(s):  
Samuel Shye ◽  
Ido Haber
Keyword(s):  
Loss Aversion ◽  
Choice Behavior ◽  
Psychological Effects ◽  
Reflection Effect ◽  
New Paradigm ◽  
New Approach ◽  
Decision Under Risk ◽  
Central Hypothesis ◽  
Psychological Models ◽  
Made In

Challenge Theory (CT) is a new approach to decision under risk that departs significantly from expected utility, and is based firmly on psychological, rather than economic, assumptions. The paper demonstrates that a purely cognitive-psychological paradigm for decision under risk can yield excellent predictions, comparable to those attained by more complex economic or psychological models that remain attached to conventional economic constructs and assumptions. The study presents a new model for predicting the popularity of choices made in binary risk problems.A CT-based regression model is tested on data gathered from 126 respondents who indicated their preferences with respect to 44 choice problems. Results support CT's central hypothesis, strongly associating between the Challenge Index (CI) attributable to every binary risk problem, and the observed popularity of the bold prospect in that problem (with r=-0.92 and r=-0.93 for gains and for losses, respectively). The novelty of the CT perspective as a new paradigm is illuminated by its simple, single-index (CI) representation of psychological effects proposed by Prospect Theory for describing choice behavior (certainty effect, reflection effect, overweighting small probabilities and loss aversion).

scholarly journals Risk as Challenge: A Dual System Stochastic Model for Binary Choice Behavior

2020 ◽  
Vol 7 (2) ◽  
pp. 33
Author(s):  
Samuel Shye ◽  
Ido Haber
Keyword(s):  
Loss Aversion ◽  
Choice Behavior ◽  
Psychological Effects ◽  
Reflection Effect ◽  
New Paradigm ◽  
New Approach ◽  
Decision Under Risk ◽  
Central Hypothesis ◽  
Psychological Models ◽  
Made In

Challenge Theory (CT) is a new approach to decision under risk that departs significantly from expected utility and is based firmly on psychological, rather than economic, assumptions. The paper demonstrates that a purely cognitive-psychological paradigm for decision under risk can yield excellent predictions, comparable to those attained by more complex economic or psychological models that remain attached to conventional economic constructs and assumptions. The study presents a new model for predicting the popularity of choices made in binary risk problems.A CT-based regression model is tested on data gathered from 126 respondents who indicated their preferences with respect to 44 choice problems. Results support CT's central hypothesis, strongly associating between the Challenge Index (CI) attributable to every binary risk problem, and the observed popularity of the bold prospect in that problem (with r=-0.92 and r=-0.93 for gains and for losses, respectively). The novelty of the CT perspective as a new paradigm is illuminated by its simple, single-index (CI) representation of psychological effects proposed by Prospect Theory for describing choice behavior (certainty effect, reflection effect, overweighting small probabilities and loss aversion).

scholarly journals Loss Aversion and its Reference Point in the Housing Market

2011 ◽  
Vol 69 (null) ◽  
pp. 141-155 ◽  
Author(s):  
김준형 ◽  
Lewis Alexander
Keyword(s):  
Housing Market ◽  
Loss Aversion ◽  
Reference Point
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