PSYC 309 Lecture Notes - Lecture 15: Ikea, Loss Aversion, Prospect Theory
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vs. ,000 seems like big jump; whereas ,000 vs. ,000 may not: drops more steeply, more sensitive to losses, hurts => aversion to loss. Individual variability: prospect theory not actually linear function; rather gain, really hurts to lose money, opportunity cost, pay to not lose opportunity. Heine (2010: place more value of something you own; value something more because it"s yours. Exam question what is the endowment effect? (greater financial value on things we own) what would be an alternate explanation of endowment effect? (can"t have it) Building and then unbuilding sets, however, caused this difference to become nonsignificant t(39)=1. 20, p=. 23. -- how that alter people"s decision making after shifting it 1 cent lower free: choice from 2 cent to 1 cent (data approx the same) 40% opt for expensive chocolate: how does it change relative to free, 90% going for free cheap chocolate, decision making change, twice as many people went for free (computer simulation)
