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Loss Aversion in Post-Sale Purchases of Consumer Products and Their Substitutes

Ray, Debajyoti and Camerer, Colin F. and Shum, Matthew (2015) Loss Aversion in Post-Sale Purchases of Consumer Products and Their Substitutes. American Economic Review, 105 (5). pp. 376-380. ISSN 0002-8282. https://resolver.caltech.edu/CaltechAUTHORS:20160329-092526564

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Abstract

This paper considers the measurement of consumer loss aversion in product markets. We introduce a test based on a "substitution effect," focusing on how the end of a sale affects sales not of the good itself, but a substitute good. Such an effect cannot be easily confounded with consumer stockpiling. Using a unique dataset from an online hardware retailer, we find evidence consistent with consumer loss aversion. Moreover, we find that less experienced consumers suffer a more prominent loss aversion bias compared to more experienced consumers.


Item Type:Article
Related URLs:
URLURL TypeDescription
http://dx.doi.org/10.1257/aer.p20151037DOIArticle
https://www.aeaweb.org/articles.php?doi=10.1257/aer.p20151037UNSPECIFIEDArticle
ORCID:
AuthorORCID
Camerer, Colin F.0000-0003-4049-1871
Shum, Matthew0000-0002-6262-915X
Additional Information:© 2015 American Economic Association. Thanks to HSS and the BNDF for support.
Funders:
Funding AgencyGrant Number
Caltech Division of Humanities and Social SciencesUNSPECIFIED
BNDFUNSPECIFIED
Issue or Number:5
Record Number:CaltechAUTHORS:20160329-092526564
Persistent URL:https://resolver.caltech.edu/CaltechAUTHORS:20160329-092526564
Official Citation:Ray, Debajyoti, Matthew Shum, and Colin F. Camerer. 2015. "Loss Aversion in Post-Sale Purchases of Consumer Products and Their Substitutes." American Economic Review, 105(5): 376-80. DOI: 10.1257/aer.p20151037
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:65729
Collection:CaltechAUTHORS
Deposited By:INVALID USER
Deposited On:31 Mar 2016 22:48
Last Modified:03 Oct 2019 09:49

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