Jump to ContentJump to Main Navigation
Bounded Rationality and Industrial Organization$
Users without a subscription are not able to see the full content.

Ran Spiegler

Print publication date: 2011

Print ISBN-13: 9780195398717

Published to Oxford Scholarship Online: September 2011

DOI: 10.1093/acprof:oso/9780195398717.001.0001

Show Summary Details
Page of

PRINTED FROM OXFORD SCHOLARSHIP ONLINE (www.oxfordscholarship.com). (c) Copyright Oxford University Press, 2020. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 04 April 2020

Loss Aversion

Loss Aversion

(p.127) 9 Loss Aversion
Bounded Rationality and Industrial Organization

Spiegler Ran

Oxford University Press

This chapter analyzes monopoly and duopoly pricing when consumers display loss aversion. It assumes that consumers’ reference point is determined by their expectations. First, the model is applied to capture the idea that consumers are antagonized by unexpected price increases, and the implications of this idea for price rigidity and uniformity. Second, the model is applied to capture an “attachment effect” (a variant on the endowment effect) and the implications of this idea for the use of sales.

Keywords:   loss aversion, monopoly pricing, duopoly pricing, reference point, expectations, unexpected price increases, price rigidity, price uniformity, attachment effect, endowment effect, sales, personal equilibrium, reference-dependent preferences

Oxford Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs , and if you can't find the answer there, please contact us .