2.6 Loss Aversion and The Endowment Effect

[@kriti3011]

Brilliant! Very clear, excellent examples!

[@markstuber4731]

One difference between the tick holdes and the non tickit holders is the the non-ticket-holders will have to go over their budget to get the ticket while the owners won't go over their budget to keep the ticket.

[@adeleaccount2024]

very helpful tutorial, Dan Ariely can really explain it well!

[@roberthermens904]

Department stores’ fitting rooms: IT’S A TRAP!

[@stuartblack7002]

Would loss aversion explain why government departments all become obsessed with justifying their own existence (beyond what is for the good of the society/economy)?

[@rowanscovell-lightfoot7028]

great video, interseting. It's funny though how he sais for us to think about how we could manipulate others for financial gain using this. Love Capitilasim.

[@jayassharma659]

UvA sent me here

[@wisdomfromthecave]

I dunno, after getting so many mugs for free being a teacher, I would swap a few mugs for a chocolate bar in a minute!

[@vivekdoshi9540]

Thank you. I am clear now.

[@Equinhoxy]

how would this be implemented into mental accounting?

[@willieboynton9067]

Inmatcher form of organisms that turn in to very different adult

[@aartdevletter5822]

What is exactly "irrational" about exhibiting loss aversive behavior?

[@Berbb420]

Under full rationality the loss shouldnt be valued more than the gains, i.e. gaining 2.5$ from 0$ should be equal to losing 2.5$ after having 5$, however research shows that losing 2.5$ is seen as gaining ~5$, which is irrational. However, it should be noted that irrational does not mean "not understable" if you feel that just earning the same amount is less valuable than being given an endowment and then losing the difference, then you are just demonstrating that natural behavior is different to what economic theory predicts

[@aleksandartodorovic8836]

What is the relation between the loss aversion and the status quo bias?

[@FruityAssassin]

Aleksandar Todorovic Little late to answering your question but felt the need as I’ve been updating my lectures on these topics. In explaining such a relationship, you would have to look at the particularities of the situation you are dealing with. The status quo bias is related to loss aversion, but also the negativity bias, mere ownership effect and familiarity bias. Factors such as individual differences, framing, techniques of persuasion, authority, who any exchange is with and time mean there is no one straight answer to your question I’m afraid.

[@user-rj1kf3nr9u]

Hi. I really want to know about this presentation and the presenter. May I ask you the source for this video?

[@evilcartman32]

This is Dan Ariely

[@ajmarr5671]

Good presentation, but with one important error, or two In classical economics, humans are judged to be broadly rational creatures, while behavioral economics demonstrates that there are intrinsic limits to rationality, or to major decision making. A common thread in both disciplines is that decision is dispassionate, with affect being the byproduct of cognition. In contrast, for the study of mammalian decision making or ‘learning theory’, and as rendered through contemporary affective neuroscience, affect is an unrelenting, distorting, and animating factor for all cognition and thus for all momentary as well as major decisions. In other words, everything we think and do is influenced by conscious or non-consciously continuously perceived affect, or emotion, and to be effective, we have to understand how affect guides every momentary choice we make. The fact that behavioral economics is based on social psychological experiments, rather than deriving from first principles as to how incentive motivation is instantiated in human brains makes its conclusions piecemeal and disjointed. Or in the words of the economist David Gal (linked below), “behavioral economists are too often concerned with describing how human behavior deviates from the assumptions of standard economic models, rather than with understanding why people behave the way they do.” The following linked treatise for a lay audience, written in consultation and with the endorsement of the distinguished affective neuroscientist Kent Berridge, perhaps can provide a counterpoint to this perspective that may illuminate, confirm, and often disconfirm many ideas in behavioral economics. Also linked is an history of incentive motivation by Dr. Berridge. www.scribd.com/document/495438436/A-Mouse-s-Tale-a-practical-explanation-and-handbook-of-motivation-from-the-perspective-of-a-humble-creature Berridge and Incentive Motivation sites.lsa.umich.edu/berridge-lab/wp-content/uploads/sites/743/2020/09/Berridge-2001-Reward-learning-chapter.pdf Berridge Lab, University of Michigan sites.lsa.umich.edu/berridge-lab/ Gal’s Criticism of behavioral economics --- and his take on why the concept of loss aversion is wrong www.nytimes.com/2018/10/06/opinion/sunday/behavioral-economics.html

[@roberthermens904]

Now, a clever man would put the poison into his own goblet, because he would know that only a great fool would reach for what he was given. I am not a great fool, so I can clearly not choose the wine in front of you. But you must have known I was not a great fool, you would have counted on it, so I can clearly not choose the wine in front of me. -Vizzini