This study examines the effect of loss aversion on the reservation value of a house seller. Contrary to the finding of a prior theoretical study by Buisson (2016), we show that loss aversion can increase the reservation value as hypothesized in many empirical literatures. Loss aversion makes the...

This paper considers an agency model in which the principal is privately informed of her production technology. In our model, the principal can require the agent to adopt the principal’s technology for production, or alternatively, to adopt a technology in the market. Information about the...