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Handbook of the Economics of Risk and Uncertainty
book

Handbook of the Economics of Risk and Uncertainty

by Mark Machina, W. Kip Viscusi
November 2013
Beginner content levelBeginner
896 pages
35h 10m
English
North Holland
Content preview from Handbook of the Economics of Risk and Uncertainty
Assessment and Estimation of Risk Preferences
145
The Eckel and Grossman treatment involves shifting all payoffs down by $6. This
shift produces possible losses for gambles with pretransformation payoffs of $4 and $0
in the top two rows, which have been shown in boldface font in the second column.
Wealth effects were controlled by having subjects fill out an initial survey in both
treatments, with no payment in the first treatment and with a $6 payment for the loss
treatment. Loss aversion is typically modeled as a kink in the utility function that pulls
utilities down to the left of the reference point. In this context, with 0 as a reference ...
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Publisher Resources

ISBN: 9780444536853