Loss Aversion

How the Endowment Effect can Affect Businesses
How the Endowment Effect can Affect Businesses

Businesses can be affected due to consumer behavior that they might find hard to predict. Many theories, models and research have long tried to predict motivations of consumers for buying goods or services based on consumer preferences

What is Behavioral Economics: Your Quick Guide
What is Behavioral Economics: Your Quick Guide

Every day we make a myriad of decisions – eat out or buy groceries, walk or hail a cab, go to the movies or stay in. Sometimes, we rationalize that cooking a home meal is a better idea since we already spent too much on dining this month. But then, we see some attractive promo at the deli and go on and change our mind in a beat. In a nutshell, behavioral economics attempts to study how our “whims” affect our day-to-day spending decisions and affect different economic processes on a macro level. Let’s dig in!

A Quick Read on Prospect Theory and Loss Aversion
A Quick Read on Prospect Theory and Loss Aversion

For a consumer, economic decisions are based on certain types of behavior. Prospect Theory or the loss-aversion theory in behavioral economics and behavioral finance, aims to determine people’s decision making and their tendency for loss aversion.