Firm Behavior Under Consumer Loss Aversion

This survey aims to provide an overview of recent developments in the industrial organization literature that explores the behavior of profit-maximizing firms facing consumers with reference-dependent preferences and loss aversion. We discuss the implications of loss aversion on the practice of price discrimination, product differentiation, and incentive provision, among others. A common theme is emerging from these studies: consumer loss aversion may serve to limit the benefits from complex firm strategies that depend on the realizations of uncertainty

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Year of publication:	2014
Authors:	Kim, Sang-Hyun
Other Persons:	Lee, Jihong (contributor)
Publisher:	[2014]: [S.l.] : SSRN
Subject:	Konsumentenverhalten \| Consumer behaviour \| Risikoaversion \| Risk aversion \| Theorie \| Theory