Testing reference dependence, loss aversion and diminishing sensitivity in Spanish tourism
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| Format: | Artículo científico |
| Language: | en |
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Fundación SEPI
2008
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| _version_ | 1876425687475159040 |
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| author | Juan Luis Nicolau |
| author_facet | Juan Luis Nicolau |
| contents | Testing reference dependence, loss aversion and diminishing sensitivity in Spanish tourism Juan Luis Nicolau Economía y Finanzas tourism prices Prospect theory Based on Tversky and Kahneman is Prospect Theory, we test the existenceof reference dependence, loss aversion and diminishing sensitivity in Spanishtourism. To do this, we incorporate the reference-dependent model into aMultinomial Logit Model with Random Parameters -which controls for heterogeneity- and apply it to a sample of vacation choices made by Spaniards. We find that the difference between reference price and actual price is considered to make decisions, confirming that reference dependence exists; that people react more strongly to price increases than to price decreases relative to theirreference price, which represents evidence in favor of the loss aversion phenomenon; and that there is diminishing sensitivity for losses only, showing convexity for these negative values. 2008 artículo científico 0210-1521 https://www.redalyc.org/articulo.oa?id=17332204 en http://www.redalyc.org/revista.oa?id=173 Investigaciones Económicas application/pdf Fundación SEPI Investigaciones Económicas (España) Num.2 Vol.XXXII |
| format | Artículo científico |
| id | redalyc_17332204 |
| institution | Redalyc |
| language | en |
| publishDate | 2008 |
| publisher | Fundación SEPI |
| spellingShingle | Testing reference dependence, loss aversion and diminishing sensitivity in Spanish tourism Juan Luis Nicolau Economía y Finanzas tourism prices Prospect theory Testing reference dependence, loss aversion and diminishing sensitivity in Spanish tourism Juan Luis Nicolau Economía y Finanzas tourism prices Prospect theory Based on Tversky and Kahneman is Prospect Theory, we test the existenceof reference dependence, loss aversion and diminishing sensitivity in Spanishtourism. To do this, we incorporate the reference-dependent model into aMultinomial Logit Model with Random Parameters -which controls for heterogeneity- and apply it to a sample of vacation choices made by Spaniards. We find that the difference between reference price and actual price is considered to make decisions, confirming that reference dependence exists; that people react more strongly to price increases than to price decreases relative to theirreference price, which represents evidence in favor of the loss aversion phenomenon; and that there is diminishing sensitivity for losses only, showing convexity for these negative values. 2008 artículo científico 0210-1521 https://www.redalyc.org/articulo.oa?id=17332204 en http://www.redalyc.org/revista.oa?id=173 Investigaciones Económicas application/pdf Fundación SEPI Investigaciones Económicas (España) Num.2 Vol.XXXII |
| title | Testing reference dependence, loss aversion and diminishing sensitivity in Spanish tourism |
| topic | Economía y Finanzas tourism prices Prospect theory |
| url | https://www.redalyc.org/articulo.oa?id=17332204 |