WorldWideScience

Sample records for greater risk aversion

  1. Risk Aversion and Engagement in the Sharing Economy

    Directory of Open Access Journals (Sweden)

    Jessica Santana

    2015-10-01

    Full Text Available The sharing economy is a new online community that has important implications for offline behavior. This study evaluates whether engagement in the sharing economy is associated with an actor’s aversion to risk. Using a web-based survey and a field experiment, we apply an adaptation of Holt and Laury’s (2002 risk lottery game to a representative sample of sharing economy participants. We find that frequency of activity in the sharing economy predicts risk aversion, but only in interaction with satisfaction. While greater satisfaction with sharing economy websites is associated with a decrease in risk aversion, greater frequency of usage is associated with greater risk aversion. This analysis shows the limitations of a static perspective on how risk attitudes relate to participation in the sharing economy.

  2. ARE PEOPLE INEQUALITY AVERSE OR JUST RISK AVERSE?

    OpenAIRE

    Carlsson, Fredrik; Daruvala, Dinky; Johansson-Stenman, Olof

    2001-01-01

    Individuals’ preferences for risk and inequality are measured through experimental choices between hypothetical societies and lotteries. The median relative risk aversion, which is often seen to reflect social inequality aversion, is between 2 and 3. We also estimate the individual inequality aversion, reflecting individuals’ willingness to pay for living in a more equal society. Left-wing voters and women are both more risk- and inequality averse than others. The model allows for non-monoton...

  3. Cognitive function is associated with risk aversion in community-based older persons.

    Science.gov (United States)

    Boyle, Patricia A; Yu, Lei; Buchman, Aron S; Laibson, David I; Bennett, David A

    2011-09-11

    Emerging data from younger and middle-aged persons suggest that cognitive ability is negatively associated with risk aversion, but this association has not been studied among older persons who are at high risk of experiencing loss of cognitive function. Using data from 369 community-dwelling older persons without dementia from the Rush Memory and Aging Project, an ongoing longitudinal epidemiologic study of aging, we examined the correlates of risk aversion and tested the hypothesis that cognition is negatively associated with risk aversion. Global cognition and five specific cognitive abilities were measured via detailed cognitive testing, and risk aversion was measured using standard behavioral economics questions in which participants were asked to choose between a certain monetary payment ($15) versus a gamble in which they could gain more than $15 or gain nothing; potential gamble gains ranged from $21.79 to $151.19 with the gain amounts varied randomly over questions. We first examined the bivariate associations of age, education, sex, income and cognition with risk aversion. Next, we examined the associations between cognition and risk aversion via mixed models adjusted for age, sex, education, and income. Finally, we conducted sensitivity analyses to ensure that our results were not driven by persons with preclinical cognitive impairment. In bivariate analyses, sex, education, income and global cognition were associated with risk aversion. However, in a mixed effect model, only sex (estimate = -1.49, standard error (SE) = 0.39, p risk aversion. Thus, a lower level of global cognitive function and female sex were associated with greater risk aversion. Moreover, performance on four out of the five cognitive domains was negatively related to risk aversion (i.e., semantic memory, episodic memory, working memory, and perceptual speed); performance on visuospatial abilities was not. A lower level of cognitive ability and female sex are associated with greater

  4. Neural intrinsic connectivity networks associated with risk aversion in old age.

    Science.gov (United States)

    Han, S Duke; Boyle, Patricia A; Arfanakis, Konstantinos; Fleischman, Debra A; Yu, Lei; Edmonds, Emily C; Bennett, David A

    2012-02-01

    Risk aversion is associated with several important real world outcomes. Although the neurobiological correlates of risk aversion have been studied in young persons, little is known of the neurobiological correlates of risk aversion among older persons. Resting-state functional MRI data were collected on 134 non-demented participants of the Rush Memory and Aging Project, a community-based cohort study of aging. Risk aversion was measured using a series of standard questions in which participants were asked to choose between a certain monetary payment ($15) versus a gamble in which they could gain more than $15 or gain nothing, with potential gains varied across questions. Participants determined to be "high" (n=27) and "low" (n=27) in risk aversion were grouped accordingly. Using a spherical seed region of interest in the anterior cingulate cortex, voxel-wise functional connectivity network similarities were observed in bilateral frontal, anterior and posterior cingulate, insula, basal ganglia, temporal, parietal, and thalamic regions. Differences in functional connectivity were observed such that those low in risk aversion had greater connectivity to clusters in the superior, middle, and medial frontal regions, as well as cerebellar, parietal, occipital, and inferior temporal regions. Those high in risk aversion had greater connectivity to clusters in the inferior and orbital frontal, parahippocampal, and insula regions, as well as thalamic, parietal, precentral gyrus, postcentral gyrus, and middle temporal regions. Similarities and differences in functional connectivity patterns may reflect the historical recruitment of specific brain regions as a network in the active processing of risk in older adults. Copyright © 2011 Elsevier B.V. All rights reserved.

  5. Peer effects in risk aversion.

    Science.gov (United States)

    Balsa, Ana I; Gandelman, Néstor; González, Nicolás

    2015-01-01

    We estimate peer effects in risk attitudes in a sample of high school students. Relative risk aversion is elicited from surveys administered at school. Identification of peer effects is based on parents not being able to choose the class within the school of their choice, and on the use of instrumental variables conditional on school-grade fixed effects. We find a significant and quantitatively large impact of peers' risk attitudes on a male individual's coefficient of risk aversion. Specifically, a one standard deviation increase in the group's coefficient of risk aversion increases an individual's risk aversion by 43%. Our findings shed light on the origin and stability of risk attitudes and, more generally, on the determinants of economic preferences. © 2014 Society for Risk Analysis.

  6. Risk Aversion and the Value of Information.

    Science.gov (United States)

    Eeckhoudt, Louis; Godfroid, Phillippe

    2000-01-01

    Explains why risk aversion does not always induce a greater information value, but instead may induce a lower information value when increased. Presents a basic model defining the concept of perfect information value and providing a numerical illustration. Includes references. (CMK)

  7. Risk Aversion and Job Mobility

    OpenAIRE

    van Huizen, T.M.; Alessie, Rob

    2016-01-01

    Job mobility is inherently risky as workers have limited ex ante information about the quality of outside jobs. Using a large longitudinal Dutch dataset, which includes data on risk preferences elicited through (incentivized) experiments, we examine the relation between risk aversion and job mobility. The results for men show that risk averse workers are less likely to move to other jobs. For women, the evidence that risk aversion affects job mobility is weak. Our empirical findings indicate ...

  8. Linking Measured Risk Aversion to Individual Characteristics.

    NARCIS (Netherlands)

    Hartog, J.; Ferrer-i-Carbonell, A.; Jonker, N.

    2002-01-01

    From the stated price of a specified lottery in three unrelated surveys we deduce individuals' Arrow-Pratt measure of risk aversion. We find that risk aversion indeed falls with income and wealth. Entrepreneurs are less risk averse than employees, civil servants are more risk averse than private

  9. The origin of risk aversion.

    Science.gov (United States)

    Zhang, Ruixun; Brennan, Thomas J; Lo, Andrew W

    2014-12-16

    Risk aversion is one of the most basic assumptions of economic behavior, but few studies have addressed the question of where risk preferences come from and why they differ from one individual to the next. Here, we propose an evolutionary explanation for the origin of risk aversion. In the context of a simple binary-choice model, we show that risk aversion emerges by natural selection if reproductive risk is systematic (i.e., correlated across individuals in a given generation). In contrast, risk neutrality emerges if reproductive risk is idiosyncratic (i.e., uncorrelated across each given generation). More generally, our framework implies that the degree of risk aversion is determined by the stochastic nature of reproductive rates, and we show that different statistical properties lead to different utility functions. The simplicity and generality of our model suggest that these implications are primitive and cut across species, physiology, and genetic origins.

  10. Enhanced Risk Aversion, But Not Loss Aversion, in Unmedicated Pathological Anxiety.

    Science.gov (United States)

    Charpentier, Caroline J; Aylward, Jessica; Roiser, Jonathan P; Robinson, Oliver J

    2017-06-15

    Anxiety disorders are associated with disruptions in both emotional processing and decision making. As a result, anxious individuals often make decisions that favor harm avoidance. However, this bias could be driven by enhanced aversion to uncertainty about the decision outcome (e.g., risk) or aversion to negative outcomes (e.g., loss). Distinguishing between these possibilities may provide a better cognitive understanding of anxiety disorders and hence inform treatment strategies. To address this question, unmedicated individuals with pathological anxiety (n = 25) and matched healthy control subjects (n = 23) completed a gambling task featuring a decision between a gamble and a safe (certain) option on every trial. Choices on one type of gamble-involving weighing a potential win against a potential loss (mixed)-could be driven by both loss and risk aversion, whereas choices on the other type-featuring only wins (gain only)-were exclusively driven by risk aversion. By fitting a computational prospect theory model to participants' choices, we were able to reliably estimate risk and loss aversion and their respective contribution to gambling decisions. Relative to healthy control subjects, pathologically anxious participants exhibited enhanced risk aversion but equivalent levels of loss aversion. Individuals with pathological anxiety demonstrate clear avoidance biases in their decision making. These findings suggest that this may be driven by a reduced propensity to take risks rather than a stronger aversion to losses. This important clarification suggests that psychological interventions for anxiety should focus on reducing risk sensitivity rather than reducing sensitivity to negative outcomes per se. Copyright © 2017 Society of Biological Psychiatry. Published by Elsevier Inc. All rights reserved.

  11. Small Stakes Risk Aversion in the Laboratory

    DEFF Research Database (Denmark)

    Harrison, Glenn W.; Lau, Morten I.; Ross, Don

    2017-01-01

    Evidence of risk aversion in laboratory settings over small stakes leads to a priori implausible levels of risk aversion over large stakes under certain assumptions. One core assumption in statements of this calibration puzzle is that small-stakes risk aversion is observed over all levels of wealth...

  12. Cognitive function is associated with risk aversion in community-based older persons

    Directory of Open Access Journals (Sweden)

    Buchman Aron S

    2011-09-01

    Full Text Available Abstract Background Emerging data from younger and middle-aged persons suggest that cognitive ability is negatively associated with risk aversion, but this association has not been studied among older persons who are at high risk of experiencing loss of cognitive function. Methods Using data from 369 community-dwelling older persons without dementia from the Rush Memory and Aging Project, an ongoing longitudinal epidemiologic study of aging, we examined the correlates of risk aversion and tested the hypothesis that cognition is negatively associated with risk aversion. Global cognition and five specific cognitive abilities were measured via detailed cognitive testing, and risk aversion was measured using standard behavioral economics questions in which participants were asked to choose between a certain monetary payment ($15 versus a gamble in which they could gain more than $15 or gain nothing; potential gamble gains ranged from $21.79 to $151.19 with the gain amounts varied randomly over questions. We first examined the bivariate associations of age, education, sex, income and cognition with risk aversion. Next, we examined the associations between cognition and risk aversion via mixed models adjusted for age, sex, education, and income. Finally, we conducted sensitivity analyses to ensure that our results were not driven by persons with preclinical cognitive impairment. Results In bivariate analyses, sex, education, income and global cognition were associated with risk aversion. However, in a mixed effect model, only sex (estimate = -1.49, standard error (SE = 0.39, p i.e., semantic memory, episodic memory, working memory, and perceptual speed; performance on visuospatial abilities was not. Conclusion A lower level of cognitive ability and female sex are associated with greater risk aversion in advanced age.

  13. Risk aversion and social networks

    NARCIS (Netherlands)

    Kovářík, J.; van der Leij, M.J.

    2014-01-01

    This paper first investigates empirically the relationship between risk aversion and social network structure in a large group of undergraduate students. We find that risk aversion is strongly correlated to local network clustering, that is, the probability that one has a social tie to friends of

  14. Risk Aversion is Associated with Decision Making among Community-Based Older Persons.

    Science.gov (United States)

    Boyle, Patricia A; Yu, Lei; Buchman, Aron S; Bennett, David A

    2012-01-01

    Risk aversion is associated with many important decisions among younger and middle aged persons, but the association of risk aversion with decision making has not been well studied among older persons who face some of the most significant decisions of their lives. Using data from 606 community-dwelling older persons without dementia from the Rush Memory and Aging Project, an ongoing longitudinal epidemiologic study of aging, we examined the association of risk aversion with decision making. Risk aversion was measured using standard behavioral economics questions in which participants were asked to choose between a certain monetary payment ($15) versus a gamble in which they could gain more than $15 or gain nothing; potential gamble gains ranged from $20 to $300 with the gain amounts varied randomly over questions. Decision making was measured using a 12 item version of the Decision Making Competence Assessment Tool. In a linear regression model adjusted for age, sex, education, and income, greater risk aversion was associated with poorer decision making [estimate = -1.03, standard error (SE) = 0.35, p = 0.003]. Subsequent analyses showed that the association of risk aversion with decision making persisted after adjustment for global cognitive function as well as executive and non-executive cognitive abilities. Similar to findings from studies of younger persons, risk aversion is associated with poorer decision making among older persons who face a myriad of complex and influential decisions.

  15. Predicting Cancer-Prevention Behavior: Disentangling the Effects of Risk Aversion and Risk Perceptions.

    Science.gov (United States)

    Riddel, Mary; Hales, David

    2018-05-16

    Experimental and survey research spanning the last two decades concludes that people who are more risk tolerant are more likely to engage in risky health activities such as smoking and heavy alcohol consumption, and are more likely to be obese. Subjective perceptions of the risk associated with different activities have also been found to be associated with health behaviors. While there are numerous studies that link risk perceptions with risky behavior, it is notable that none of these controls for risk aversion. Similarly, studies that control for risk aversion fail to control for risk misperceptions. We use a survey of 474 men and women to investigate the influence of risk aversion, risk misperceptions, and cognitive ability on the choice to engage in behaviors that either increase or mitigate cancer risk. We measure optimism in two dimensions: baseline optimists are those who inaccurately believe their cancer risk to be below its expert-assessed level, while control optimists are those who believe they can reduce their risk of cancer (by changing their lifestyle choices) to a greater extent than is actually the case. Our results indicate that baseline optimism is significantly and negatively correlated with subjects' tendencies to engage in cancer-risk-reducing behaviors, and positively correlated with risky behaviors. Subjects' control misperceptions also appear to play a role in their tendency to engage in risky and prevention behaviors. When controlling for both of these types of risk misperception, risk aversion plays a much smaller role in determining health behaviors than found in past studies. © 2018 Society for Risk Analysis.

  16. Risk Aversion Relates to Cognitive Ability

    DEFF Research Database (Denmark)

    Andersson, Ola; Holm, Håkan J.; Tyran, Jean-Robert Karl

    2016-01-01

    Recent experimental studies suggest that risk aversion is negatively related to cognitive ability. In this paper we report evidence that this relation might be spurious. We recruit a large subject pool drawn from the general Danish population for our experiment. By presenting subjects with choice...... tasks that vary the bias induced by random choices, we are able to generate both negative and positive correlations between risk aversion and cognitive ability. Structural estimation allowing for heterogeneity of noise yields no significant relation between risk aversion and cognitive ability. Our...... results suggest that cognitive ability is related to random decision making, rather than to risk preferences....

  17. Risk aversion relates to cognitive ability

    DEFF Research Database (Denmark)

    Andersson, Ola; Holm, Håkan J.; Tyran, Jean-Robert Karl

    Recent experimental studies suggest that risk aversion is negatively related to cognitive ability. In this paper we report evidence that this relation might be spurious. We recruit a large subject pool drawn from the general Danish population for our experiment. By presenting subjects with choice...... tasks that vary the bias induced by random choices, we are able to generate both negative and positive correlations between risk aversion and cognitive ability. Structural estimation allowing for heterogeneity of noise yields no significant relation between risk aversion and cognitive ability. Our...... results suggest that cognitive ability is related to random decision making rather than to risk preferences....

  18. The risks of risk aversion in drug regulation.

    Science.gov (United States)

    Eichler, Hans-Georg; Bloechl-Daum, Brigitte; Brasseur, Daniel; Breckenridge, Alasdair; Leufkens, Hubert; Raine, June; Salmonson, Tomas; Schneider, Christian K; Rasi, Guido

    2013-12-01

    Drugs are approved by regulatory agencies on the basis of their assessment of whether the available evidence indicates that the benefits of the drug outweigh its risks. In recent years, regulatory agencies have been criticized both for being overly tolerant of risks or being excessively risk-averse, which reflects the challenge in determining an appropriate balance between benefit and risk with the limited data that is typically available before drug approval. The negative consequences of regulatory tolerance in allowing drugs onto the market that turn out to be unsafe are obvious, but the potential for adverse effects on public health owing to the absence of new drugs because of regulatory risk-aversion is less apparent. Here, we discuss the consequences of regulatory risk-aversion for public health and suggest what might be done to best align acceptance of risk and uncertainty by regulators with the interests of public health.

  19. Reward salience and risk aversion underlie differential ACC activity in substance dependence.

    Science.gov (United States)

    Alexander, William H; Fukunaga, Rena; Finn, Peter; Brown, Joshua W

    2015-01-01

    The medial prefrontal cortex, especially the dorsal anterior cingulate cortex (ACC), has long been implicated in cognitive control and error processing. Although the association between ACC and behavior has been established, it is less clear how ACC contributes to dysfunctional behavior such as substance dependence. Evidence from neuroimaging studies investigating ACC function in substance users is mixed, with some studies showing disengagement of ACC in substance dependent individuals (SDs), while others show increased ACC activity related to substance use. In this study, we investigate ACC function in SDs and healthy individuals performing a change signal task for monetary rewards. Using a priori predictions derived from a recent computational model of ACC, we find that ACC activity differs between SDs and controls in factors related to reward salience and risk aversion between SDs and healthy individuals. Quantitative fits of a computational model to fMRI data reveal significant differences in best fit parameters for reward salience and risk preferences. Specifically, the ACC in SDs shows greater risk aversion, defined as concavity in the utility function, and greater attention to rewards relative to reward omission. Furthermore, across participants risk aversion and reward salience are positively correlated. The results clarify the role that ACC plays in both the reduced sensitivity to omitted rewards and greater reward valuation in SDs. Clinical implications of applying computational modeling in psychiatry are also discussed.

  20. Risk aversion and compliance in markets for pollution control.

    Science.gov (United States)

    Stranlund, John K

    2008-07-01

    This paper examines the effects of risk aversion on compliance choices in markets for pollution control. A firm's decision to be compliant or not is independent of its manager's risk preference. However, non-compliant firms with risk-averse managers will have lower violations than otherwise identical firms with risk-neutral managers. The violations of non-compliant firms with risk-averse managers are independent of differences in their profit functions and their initial allocations of permits if and only if their managers' utility functions exhibit constant absolute risk aversion. However, firm-level characteristics do impact violation choices when managers have coefficients of absolute risk aversion that are increasing or decreasing in profit levels. Finally, in the equilibrium of a market for emissions rights with widespread non-compliance, risk aversion is associated with higher permit prices, better environmental quality, and lower aggregate violations.

  1. Correlations of self-esteem and intolerance of ambiguity with risk aversion.

    Science.gov (United States)

    Johanson, J C

    2000-10-01

    The current paper reports for 80 undergraduates that risk aversion is greater among those with lower self-esteem scores on Rosenberg's Self-esteem Scale and those with higher scores on Budner's Intolerance of Ambiguity Scale.

  2. Time-varying risk aversion. An application to energy hedging

    Energy Technology Data Exchange (ETDEWEB)

    Cotter, John [Centre for Financial Markets, School of Business, University College Dublin, Blackrock, Co. Dublin (Ireland); Hanly, Jim [School of Accounting and Finance, Dublin Institute of Technology, Dublin 2 (Ireland)

    2010-03-15

    Risk aversion is a key element of utility maximizing hedge strategies; however, it has typically been assigned an arbitrary value in the literature. This paper instead applies a GARCH-in-Mean (GARCH-M) model to estimate a time-varying measure of risk aversion that is based on the observed risk preferences of energy hedging market participants. The resulting estimates are applied to derive explicit risk aversion based optimal hedge strategies for both short and long hedgers. Out-of-sample results are also presented based on a unique approach that allows us to forecast risk aversion, thereby estimating hedge strategies that address the potential future needs of energy hedgers. We find that the risk aversion based hedges differ significantly from simpler OLS hedges. When implemented in-sample, risk aversion hedges for short hedgers outperform the OLS hedge ratio in a utility based comparison. (author)

  3. Time-varying risk aversion. An application to energy hedging

    International Nuclear Information System (INIS)

    Cotter, John; Hanly, Jim

    2010-01-01

    Risk aversion is a key element of utility maximizing hedge strategies; however, it has typically been assigned an arbitrary value in the literature. This paper instead applies a GARCH-in-Mean (GARCH-M) model to estimate a time-varying measure of risk aversion that is based on the observed risk preferences of energy hedging market participants. The resulting estimates are applied to derive explicit risk aversion based optimal hedge strategies for both short and long hedgers. Out-of-sample results are also presented based on a unique approach that allows us to forecast risk aversion, thereby estimating hedge strategies that address the potential future needs of energy hedgers. We find that the risk aversion based hedges differ significantly from simpler OLS hedges. When implemented in-sample, risk aversion hedges for short hedgers outperform the OLS hedge ratio in a utility based comparison. (author)

  4. How does economic risk aversion affect biodiversity?

    Science.gov (United States)

    Mouysset, L; Doyen, L; Jiguet, F

    2013-01-01

    Significant decline of biodiversity in farmlands has been reported for several decades. To limit the negative impact of agriculture, many agro-environmental schemes have been implemented, but their effectiveness remains controversial. In this context, the study of economic drivers is helpful to understand the role played by farming on biodiversity. The present paper analyzes the impact of risk aversion on farmland biodiversity. Here "risk aversion" means a cautious behavior of farmers facing uncertainty. We develop a bio-economic model that articulates bird community dynamics and representative farmers selecting land uses within an uncertain macro-economic context. It is specialized and calibrated at a regional scale for France through national databases. The influence of risk aversion is assessed on ecological, agricultural, and economic outputs through projections at the 2050 horizon. A high enough risk aversion appears sufficient to both manage economic risk and promote ecological performance. This occurs through a diversification mechanism on regional land uses. However, economic calibration leads to a weak risk-aversion parameter, which is consistent with the current decline of farmland birds. Spatial disparities however suggest that public incentives could be necessary to reinforce the diversification and bio-economic effectiveness.

  5. Brief Report: Risk-Aversion and Rationality in Autism Spectrum Disorders.

    Science.gov (United States)

    Gosling, Corentin J; Moutier, Sylvain

    2018-05-30

    Risk-aversion and rationality have both been highlighted as core features of decision making in individuals with Autism Spectrum Disorders (ASD). This study tested whether risk-aversion is related to rational decision-making in ASD individuals. ASD and matched control adults completed a decision-making task that discriminated between the use of risk-averse and rational strategies. Results showed that overall, ASD participants were more risk-averse than control participants. Specifically, both groups made similar choices when risk-aversion was the less rational strategy but ASD participants chose more rational options than control participants when risk-aversion was the most rational strategy. This study confirmed that risk-aversion is a core feature of ASD and revealed that ASD individuals can switch their decision-making strategy adaptively to avoid negative consequences.

  6. Risk Aversion, Price Uncertainty and Irreversible Investments

    NARCIS (Netherlands)

    van den Goorbergh, R.W.J.; Huisman, K.J.M.; Kort, P.M.

    2003-01-01

    This paper generalizes the theory of irreversible investment under uncertainty by allowing for risk averse investors in the absence of com-plete markets.Until now this theory has only been developed in the cases of risk neutrality, or risk aversion in combination with complete markets.Within a

  7. Effective return, risk aversion and drawdowns

    Science.gov (United States)

    Dacorogna, Michel M.; Gençay, Ramazan; Müller, Ulrich A.; Pictet, Olivier V.

    2001-01-01

    We derive two risk-adjusted performance measures for investors with risk averse preferences. Maximizing these measures is equivalent to maximizing the expected utility of an investor. The first measure, Xeff, is derived assuming a constant risk aversion while the second measure, Reff, is based on a stronger risk aversion to clustering of losses than of gains. The clustering of returns is captured through a multi-horizon framework. The empirical properties of Xeff, Reff are studied within the context of real-time trading models for foreign exchange rates and their properties are compared to those of more traditional measures like the annualized return, the Sharpe Ratio and the maximum drawdown. Our measures are shown to be more robust against clustering of losses and have the ability to fully characterize the dynamic behaviour of investment strategies.

  8. Characterizing the genetic influences on risk aversion.

    Science.gov (United States)

    Harrati, Amal

    2014-01-01

    Risk aversion has long been cited as an important factor in retirement decisions, investment behavior, and health. Some of the heterogeneity in individual risk tolerance is well understood, reflecting age gradients, wealth gradients, and similar effects, but much remains unexplained. This study explores genetic contributions to heterogeneity in risk aversion among older Americans. Using over 2 million genetic markers per individual from the U.S. Health and Retirement Study, I report results from a genome-wide association study (GWAS) on risk preferences using a sample of 10,455 adults. None of the single-nucleotide polymorphisms (SNPs) are found to be statistically significant determinants of risk preferences at levels stricter than 5 × 10(-8). These results suggest that risk aversion is a complex trait that is highly polygenic. The analysis leads to upper bounds on the number of genetic effects that could exceed certain thresholds of significance and still remain undetected at the current sample size. The findings suggest that the known heritability in risk aversion is likely to be driven by large numbers of genetic variants, each with a small effect size.

  9. Health shocks and risk aversion.

    Science.gov (United States)

    Decker, Simon; Schmitz, Hendrik

    2016-12-01

    We empirically assess whether a health shock influences individual risk aversion. We use grip strength data to obtain an objective health shock indicator. In order to account for the non-random nature of our data regression-adjusted matching is employed. Risk preferences are traditionally assumed to be constant. However, we find that a health shock increases individual risk aversion. The finding is robust to a series of sensitivity analyses and persists for at least four years after the shock. Income changes do not seem to be the driving mechanism. Copyright © 2016 Elsevier B.V. All rights reserved.

  10. Small Stakes Risk Aversion in the Laboratory

    DEFF Research Database (Denmark)

    Harrison, Glenn W.; Lau, Morten; Ross, Don

    Evidence of risk aversion in laboratory settings over small stakes leads to a priori implausible levels of risk aversion over large stakes under certain assumptions. One core assumption in standard statements of this calibration puzzle is that individuals define utility over terminal wealth......, and that terminal wealth is defined as the sum of extra-lab wealth and any wealth accumulated in the lab. This assumption is often used in Expected Utility Theory, as well as popular alternatives such as RankDependent Utility theory. Another core assumption is that the small-stakes risk aversion is observed over...... all levels of wealth, or over a “sufficiently large” range of wealth. Although this second assumption if often viewed as self-evident from the vast experimental literature showing risk aversion over laboratory stakes, it actually requires that lab wealth be varied for a given subject as one takes...

  11. Risk Aversion and Emotions

    NARCIS (Netherlands)

    Nguyen, Y.; Noussair, C.N.

    2013-01-01

    Abstract: We consider the relationship between emotions and decision-making under risk. Specifically, we examine the emotional correlates of risk-averse decisions. In our experiment, individuals' facial expressions are monitored with facereading software, as they are presented with risky lotteries.

  12. Risk-Averse Newsvendor Model with Strategic Consumer Behavior

    Directory of Open Access Journals (Sweden)

    Tie Wang

    2013-01-01

    Full Text Available The classic newsvendor problem focuses on maximizing the expected profit or minimizing the expected cost when the newsvendor faces myopic customers. However, it ignores the customer’s bargain-hunting behavior and risk preference measure of the newsvendor. As a result, we carry out the rational expectation (RE equilibrium analysis for risk-averse newsvendor facing forward-looking customers who anticipate future sales and choose purchasing timing to maximize their expected surplus. We propose the equations satisfied by the RE equilibrium price and quantity for the risk-averse retailer in general setting and the explicit equilibrium decisions for the case where demand follows the uniform distribution and utility is a general power function. We identify the impacts of the system parameters on the RE equilibrium for this specific situation. In particular, we show that the RE equilibrium price for some risk-averse newsvendors is lower than for a risk-neutral retailer and the RE equilibrium stocking quantity for some risk-averse newsvendors is higher than for a risk-neutral retailer. We also find that the RE equilibrium sale price for a risk-averse newsvendor is decreasing in salvage price in some situations.

  13. Risk aversion in medical decision making: a survey

    OpenAIRE

    Liliana Chicaíza; Mario García; Giancarlo Romano

    2011-01-01

    This article surveys the literature on risk aversion in medical decision making. The search covered Econlit, Jstor Science Direct and Springer Link since 1985. The results are classified in three topics: Risk aversion in the frameworks of Expected Utility and Rank Dependent Expected Utility theories, and the methodologies for measuring risk aversion and its applications to clinical situations from the points of view of economics and psychology. It was found that, despite conceptual and method...

  14. Heightened aversion to risk and loss in depressed patients with a suicide attempt history.

    Science.gov (United States)

    Baek, Kwangyeol; Kwon, JaeHyung; Chae, Jeong-Ho; Chung, Yong An; Kralik, Jerald D; Min, Jung-Ah; Huh, HyuJung; Choi, Kyung Mook; Jang, Kuk-In; Lee, Na-Bin; Kim, Sunyoung; Peterson, Bradley S; Jeong, Jaeseung

    2017-09-11

    Suicide attempters have been found to be impaired in decision-making; however, their specific biases in evaluating uncertain outcomes remain unclear. Here we tested the hypothesis that suicidal behavior is associated with heightened aversion to risk and loss, which might produce negative predictions about uncertain future events. Forty-five depressed patients with a suicide attempt history, 47 nonsuicidal depressed patients, and 75 healthy controls participated in monetary decision-making tasks assessing risk and loss aversion. Suicide attempters compared with the other groups exhibited greater aversion to both risk and loss during gambles involving potential loss. Risk and loss aversion correlated with each other in the depressed patients, suggesting that a common pathophysiological mechanism underlies these biases. In addition, emotion regulation via suppression, a detrimental emotional control strategy, was positively correlated with loss aversion in the depressed patients, also implicating impairment in regulatory processes. A preliminary fMRI study also found disrupted neural responses to potential gains and losses in the subgenual anterior cingulate cortex, insula cortex, and left amygdala, brain regions involved in valuation, emotion reactivity, and emotion regulation. The findings thus implicate heightened negative valuation in decision-making under risk, and impaired emotion regulation in depressed patients with a history of suicide attempts.

  15. The importance of risk-aversion as a measurable psychological parameter governing risk-taking behaviour

    International Nuclear Information System (INIS)

    Thomas, P J

    2013-01-01

    A utility function with risk-aversion as its sole parameter is developed and used to examine the well-known psychological phenomenon, whereby risk averse people adopt behavioural strategies that are extreme and apparently highly risky. The pioneering work of the psychologist, John W. Atkinson, is revisited, and utility theory is used to extend his mathematical model. His explanation of the psychology involved is improved by regarding risk-aversion not as a discrete variable with three possible states: risk averse, risk neutral and risk confident, but as continuous and covering a large range. A probability distribution is derived, the m otivational density , to describe the process of selecting tasks of different degrees of difficulty. An assessment is then made of practicable methods for measuring risk-aversion

  16. The importance of risk-aversion as a measurable psychological parameter governing risk-taking behaviour

    Science.gov (United States)

    Thomas, P. J.

    2013-09-01

    A utility function with risk-aversion as its sole parameter is developed and used to examine the well-known psychological phenomenon, whereby risk averse people adopt behavioural strategies that are extreme and apparently highly risky. The pioneering work of the psychologist, John W. Atkinson, is revisited, and utility theory is used to extend his mathematical model. His explanation of the psychology involved is improved by regarding risk-aversion not as a discrete variable with three possible states: risk averse, risk neutral and risk confident, but as continuous and covering a large range. A probability distribution is derived, the "motivational density", to describe the process of selecting tasks of different degrees of difficulty. An assessment is then made of practicable methods for measuring risk-aversion.

  17. Differences in Risk Aversion between Young and Older Adults.

    Science.gov (United States)

    Albert, Steven M; Duffy, John

    2012-01-15

    Research on decision-making strategies among younger and older adults suggests that older adults may be more risk averse than younger people in the case of potential losses. These results mostly come from experimental studies involving gambling paradigms. Since these paradigms involve substantial demands on memory and learning, differences in risk aversion or other features of decision-making attributed to age may in fact reflect age-related declines in cognitive abilities. In the current study, older and younger adults completed a simpler, paired lottery choice task used in the experimental economics literature to elicit risk aversion. A similar approach was used to elicit participants' discount rates. The older adult group was more risk averse than younger adults (p Risk aversion and implied discount rates were weakly correlated. It may be valuable to investigate developmental changes in neural correlates of decision-making across the lifespan.

  18. Patient risk perceptions for carotid endarterectomy: which patients are strongly averse to surgery?

    Science.gov (United States)

    Bosworth, Hayden B; Stechuchak, Karen M; Grambow, Steven C; Oddone, Eugene Z

    2004-07-01

    Patient risk perception for surgery may be central to their willingness to undergo surgery. This study examined potential factors associated with patient aversion of surgery. This is a secondary data analysis of a prospective cohort study that examined patients referred for evaluation of carotid artery stenosis at five Veterans Affairs Medical Centers. The study collected demographic, clinical, and psychosocial information related to surgery. This analysis focused on patient response to a question assessing their aversion to surgery. Among the 1065 individuals, at the time of evaluation for carotid endarterectomy (CEA), 66% of patients had no symptoms, 16% had a transient ischemic attack, and 18% had stroke. Twelve percent of patients referred for CEA evaluation were averse to surgery. In adjusted analyses, increased age, black race, no previous surgery, lower level of chance locus of control, less trust of physicians, and less social support were significantly related to greater likelihood of surgery aversion among individuals referred for CEA evaluation. Patient degree of medical comorbidity and a validated measure of preoperative risk score were not associated with increased aversion to surgery. In previous work, aversion to CEA was associated with lack of receipt of CEA even after accounting for patient clinical appropriateness for surgery. We identified important patient characteristics associated with aversion to CEA. Interventions designed to assist patient decision making should focus on these more complex factors related to CEA aversion rather than the simple explanation of clinical usefulness.

  19. Optimal Consumption and Investment under Time-Varying Relative Risk Aversion

    DEFF Research Database (Denmark)

    Steffensen, Mogens

    2011-01-01

    We consider the continuous time consumption-investment problem originally formalized and solved by Merton in case of constant relative risk aversion. We present a complete solution for the case where relative risk aversion with respect to consumption varies with time, having in mind an investor...... with age-dependent risk aversion. This provides a new motivation for life-cycle investment rules. We study the optimal consumption and investment rules, in particular in the case where the relative risk aversion with respect to consumption is increasing with age....

  20. Risk Aversion and Expected-Utility Theory: A Calibration Theorem.

    OpenAIRE

    Matthew Rabin.

    2000-01-01

    Within the expected-utility framework, the only explanation for risk aversion is that the utility function for wealth is concave: A person has lower marginal utility for additional wealth when she is wealthy than when she is poor. This paper provides a theorem showing that expected-utility theory is an utterly implausible explanation for appreciable risk aversion over modest stakes: Within expected-utility theory, for any concave utility function, even very little risk aversion over modest st...

  1. Risk Aversion and Job Mobility

    NARCIS (Netherlands)

    van Huizen, T.M.; Alessie, Rob

    2016-01-01

    Job mobility is inherently risky as workers have limited ex ante information about the quality of outside jobs. Using a large longitudinal Dutch dataset, which includes data on risk preferences elicited through (incentivized) experiments, we examine the relation between risk aversion and job

  2. The role of risk aversion in non-conscious decision making.

    Science.gov (United States)

    Wang, Shuo; Krajbich, Ian; Adolphs, Ralph; Tsuchiya, Naotsugu

    2012-01-01

    To what extent can people choose advantageously without knowing why they are making those choices? This hotly debated question has capitalized on the Iowa Gambling Task (IGT), in which people often learn to choose advantageously without appearing to know why. However, because the IGT is unconstrained in many respects, this finding remains debated and other interpretations are possible (e.g., risk aversion, ambiguity aversion, limits of working memory, or insensitivity to reward/punishment can explain the finding of the IGT). Here we devised an improved variant of the IGT in which the deck-payoff contingency switches after subjects repeatedly choose from a good deck, offering the statistical power of repeated within-subject measures based on learning the reward contingencies associated with each deck. We found that participants exhibited low confidence in their choices, as probed with post-decision wagering, despite high accuracy in selecting advantageous decks in the task, which is putative evidence for non-conscious decision making. However, such a behavioral dissociation could also be explained by risk aversion, a tendency to avoid risky decisions under uncertainty. By explicitly measuring risk aversion for each individual, we predicted subjects' post-decision wagering using Bayesian modeling. We found that risk aversion indeed does play a role, but that it did not explain the entire effect. Moreover, independently measured risk aversion was uncorrelated with risk aversion exhibited during our version of the IGT, raising the possibility that the latter risk aversion may be non-conscious. Our findings support the idea that people can make optimal choices without being fully aware of the basis of their decision. We suggest that non-conscious decision making may be mediated by emotional feelings of risk that are based on mechanisms distinct from those that support cognitive assessment of risk.

  3. Neurocognitive development of risk aversion from early childhood to adulthood

    Directory of Open Access Journals (Sweden)

    David ePaulsen

    2012-01-01

    Full Text Available Human adults tend to avoid risk. In behavioral economic studies, risk aversion is manifest as a preference for sure gains over uncertain gains. However, children tend to be less averse to risk than adults. Given that many of the brain regions supporting decision making under risk do not reach maturity until late adolescence or beyond it is possible that mature risk-averse behavior may emerge from the development of decision-making circuitry. To explore this hypothesis, we tested 6- to 8-year-old children, 14- to 16-year-old adolescents, and young adults in a risky-decision task during functional magnetic resonance imaging (fMRI data acquisition. We found a number of decision-related brain regions to increase in activation with age during decision making, including areas associated with contextual memory retrieval and the incorporation of prior outcomes into the current decision-making strategy, e.g. insula, hippocampus and amygdala. Further, children who were more risk averse showed increased activation during decision making in vmPFC and ventral striatum. Our findings indicate that the emergence of adult levels of risk aversion co-occurs with the recruitment of regions supporting decision making under risk, including the integration of prior outcomes into current decision-making behavior. This pattern of results suggests that individual differences in the development of risk aversion may reflect differences in the maturation of these neural processes.

  4. Risk Aversion and Sorting into Public Sector Employment

    OpenAIRE

    Pfeifer, Christian

    2008-01-01

    This research note uses two German data sets – the large-scale German Socio-Economic Panel and unique data from own student questionnaires – to analyse the relationship between risk aversion and the choice for public sector employment. Main results are: (1) more risk averse individuals sort into public sector employment, (2) the impact of career specific and unemployment risk attitudes is larger than the impact of general risk attitudes, and (3) risk taking is rewarded with higher wages in th...

  5. Gender differences in financial risk aversion and career choices are affected by testosterone.

    Science.gov (United States)

    Sapienza, Paola; Zingales, Luigi; Maestripieri, Dario

    2009-09-08

    Women are generally more risk averse than men. We investigated whether between- and within-gender variation in financial risk aversion was accounted for by variation in salivary concentrations of testosterone and in markers of prenatal testosterone exposure in a sample of >500 MBA students. Higher levels of circulating testosterone were associated with lower risk aversion among women, but not among men. At comparably low concentrations of salivary testosterone, however, the gender difference in risk aversion disappeared, suggesting that testosterone has nonlinear effects on risk aversion regardless of gender. A similar relationship between risk aversion and testosterone was also found using markers of prenatal testosterone exposure. Finally, both testosterone levels and risk aversion predicted career choices after graduation: Individuals high in testosterone and low in risk aversion were more likely to choose risky careers in finance. These results suggest that testosterone has both organizational and activational effects on risk-sensitive financial decisions and long-term career choices.

  6. Differences in risk aversion between young and older adults

    Directory of Open Access Journals (Sweden)

    Albert SM

    2012-02-01

    Full Text Available Steven M Albert1, John Duffy21Department of Behavioral and Community Health Sciences, 2Department of Economics, University of Pittsburgh, Pittsburgh, PA, USAAbstract: Research on decision-making strategies among younger and older adults suggests that older adults may be more risk averse than younger people in the case of potential losses. These results mostly come from experimental studies involving gambling paradigms. Since these paradigms involve substantial demands on memory and learning, differences in risk aversion or other features of decision making attributed to age may in fact reflect age-related declines in cognitive abilities. In the current study, older and younger adults completed a simpler, paired lottery choice task used in the experimental economics literature to elicit risk aversion. A similar approach was used to elicit participants' discount rates. The older adult group was more risk averse than the younger (P < 0.05 and had a higher discount rate (15.6%–21.0% versus 10.3%–15.5%, P < 0.01, indicating lower expected utility from future income. Risk aversion and implied discount rates were weakly correlated. It may be valuable to investigate developmental changes in neural correlates of decision making across the lifespan.Keywords: aging, decision making, risk, time preference, behavioral economics

  7. Risk Aversion and Public Reporting. Part 2: Mitigation Strategies.

    Science.gov (United States)

    Shahian, David M; Jacobs, Jeffrey P; Badhwar, Vinay; D'Agostino, Richard S; Bavaria, Joseph E; Prager, Richard L

    2017-12-01

    Part 1 of this review summarizes the consequences of risk aversion and the observational studies and surveys relevant to this phenomenon, almost all of which are derived from cardiac surgery and interventional cardiology. In Part 2, we describe the root cause of risk aversion-the belief by providers that current risk adjustment is inadequate to account for the severity of their highest-risk patients, thereby prejudicing their publicly reported performance scores. Evidence supporting the robustness of current risk adjustment is presented, as well as nine potential strategies to further mitigate risk aversion: optimization of data source, risk models, and performance measures; exclusion of high-risk patients; exclusion of non-procedure-related end points; separate reporting of high-risk patients; reporting by condition or diagnosis rather than by procedures; reporting at the hospital or program level rather than the physician level; collaborative, cross-disciplinary decision making; active surveillance for risk aversion; and improved stakeholder education. Of these, the first is most desirable, widely applicable, and resistant to gaming. Copyright © 2017 The Society of Thoracic Surgeons. Published by Elsevier Inc. All rights reserved.

  8. Hiring a Gay Man, Taking a Risk?: A Lab Experiment on Employment Discrimination and Risk Aversion.

    Science.gov (United States)

    Baert, Stijn

    2018-01-01

    We investigate risk aversion as a driver of labor market discrimination against homosexual men. We show that more hiring discrimination by more risk-averse employers is consistent with taste-based and statistical discrimination. To test this hypothesis we conduct a scenario experiment in which experimental employers take a fictitious hiring decision concerning a heterosexual or homosexual male job candidate. In addition, participants are surveyed on their risk aversion and other characteristics that might correlate with this risk aversion. Analysis of the (post-)experimental data confirms our hypothesis. The likelihood of a beneficial hiring decision for homosexual male candidates decreases by 31.7% when employers are a standard deviation more risk-averse.

  9. Neurocognitive development of risk aversion from early childhood to adulthood.

    Science.gov (United States)

    Paulsen, David J; Carter, R McKell; Platt, Michael L; Huettel, Scott A; Brannon, Elizabeth M

    2011-01-01

    Human adults tend to avoid risk. In behavioral economic studies, risk aversion is manifest as a preference for sure gains over uncertain gains. However, children tend to be less averse to risk than adults. Given that many of the brain regions supporting decision-making under risk do not reach maturity until late adolescence or beyond it is possible that mature risk-averse behavior may emerge from the development of decision-making circuitry. To explore this hypothesis, we tested 5- to 8-year-old children, 14- to 16-year-old adolescents, and young adults in a risky-decision task during functional magnetic resonance imaging (fMRI) data acquisition. To our knowledge, this is the youngest sample of children in an fMRI decision-making task. We found a number of decision-related brain regions to increase in activation with age during decision-making, including areas associated with contextual memory retrieval and the incorporation of prior outcomes into the current decision-making strategy, e.g., insula, hippocampus, and amygdala. Further, children who were more risk-averse showed increased activation during decision-making in ventromedial prefrontal cortex and ventral striatum. Our findings indicate that the emergence of adult levels of risk aversion co-occurs with the recruitment of regions supporting decision-making under risk, including the integration of prior outcomes into current decision-making behavior. This pattern of results suggests that individual differences in the development of risk aversion may reflect differences in the maturation of these neural processes.

  10. Climate policy: Risk-averse governments

    Science.gov (United States)

    Harris, Paul G.

    2014-04-01

    Relative to the scale of the problem, climate policies worldwide have failed. Now research explains why policy innovations are often inadequate, routinely reflecting the aversion of policymakers to the risk of failure.

  11. Mathematical Modeling for Risk Averse Firm Facing Loss Averse Customer’s Stochastic Uncertainty

    Directory of Open Access Journals (Sweden)

    Seungbeom Kim

    2017-01-01

    Full Text Available To optimize the firm’s profit during a finite planning horizon, a dynamic programming model is used to make joint pricing and inventory replenishment decision assuming that customers are loss averse and the firm is risk averse. We model the loss averse customer’s demand using the multinomial choice model. In this choice model, we consider the acquisition and transition utilities widely used by a mental accounting theory which also incorporate the reference price and actual price. Then, we show that there is an optimal inventory policy which is base-stock policy depending on the accumulated wealth in each period.

  12. Risk Aversion, Loss Aversion, and the Demand for Insurance

    Directory of Open Access Journals (Sweden)

    Louis Eeckhoudt

    2018-05-01

    Full Text Available In this paper we analyze insurance demand when the utility function depends both upon final wealth and the level of losses or gains relative to a reference point. Besides some comparative statics results, we discuss the links with first-order risk aversion, with the Omega measure, and with a tendency to over-insure modest risks that has been been extensively documented in real insurance markets.

  13. Impact of childhood trauma and cognitive emotion regulation strategies on risk-aversive and loss-aversive patterns of decision-making in patients with depression.

    Science.gov (United States)

    Huh, Hyu Jung; Baek, Kwangyeol; Kwon, Jae-Hyung; Jeong, Jaeseung; Chae, Jeong-Ho

    2016-11-01

    Although poor decision-making ultimately impairs quality of life in depression, few studies describe the clinical characteristics of patients suffering from dysfunctional decision-making. This study aims to delineate the effect of childhood trauma and other personality factors on risk-aversive and loss-aversive patterns of decision-making in patients with depression. A total of 50 depressive patients completed surveys for the measurement of sociodemographic factors, trauma loads and other clinical characteristics, including depression, anxiety, and strategies for emotion regulation. Risk aversion and loss aversion were quantified using probability discounting task and a 50:50 gamble on monetary decision-making task under specified risks. Stepwise multiple regression analysis was performed to determine the factors, predicting risk aversion or loss aversion in depression. Childhood trauma was the most prominent factor predicting loss aversion in patients with depressive disorders. Overall maladaptive emotion regulation strategies were associated with risk aversion. Childhood trauma and specific strategies of emotion regulation contribute to risk or loss aversion in patients with depression. These findings may provide useful insight into elaborative evaluation and interventions to improve decision-making and quality of life in patients with depression.

  14. Methods for measuring risk-aversion: problems and solutions

    International Nuclear Information System (INIS)

    Thomas, P J

    2013-01-01

    Risk-aversion is a fundamental parameter determining how humans act when required to operate in situations of risk. Its general applicability has been discussed in a companion presentation, and this paper examines methods that have been used in the past to measure it and their attendant problems. It needs to be borne in mind that risk-aversion varies with the size of the possible loss, growing strongly as the possible loss becomes comparable with the decision maker's assets. Hence measuring risk-aversion when the potential loss or gain is small will produce values close to the risk-neutral value of zero, irrespective of who the decision maker is. It will also be shown how the generally accepted practice of basing a measurement on the results of a three-term Taylor series will estimate a limiting value, minimum or maximum, rather than the value utilised in the decision. A solution is to match the correct utility function to the results instead

  15. Methods for measuring risk-aversion: problems and solutions

    Science.gov (United States)

    Thomas, P. J.

    2013-09-01

    Risk-aversion is a fundamental parameter determining how humans act when required to operate in situations of risk. Its general applicability has been discussed in a companion presentation, and this paper examines methods that have been used in the past to measure it and their attendant problems. It needs to be borne in mind that risk-aversion varies with the size of the possible loss, growing strongly as the possible loss becomes comparable with the decision maker's assets. Hence measuring risk-aversion when the potential loss or gain is small will produce values close to the risk-neutral value of zero, irrespective of who the decision maker is. It will also be shown how the generally accepted practice of basing a measurement on the results of a three-term Taylor series will estimate a limiting value, minimum or maximum, rather than the value utilised in the decision. A solution is to match the correct utility function to the results instead.

  16. Endogenous time-varying risk aversion and asset returns.

    Science.gov (United States)

    Berardi, Michele

    2016-01-01

    Stylized facts about statistical properties for short horizon returns in financial markets have been identified in the literature, but a satisfactory understanding for their manifestation is yet to be achieved. In this work, we show that a simple asset pricing model with representative agent is able to generate time series of returns that replicate such stylized facts if the risk aversion coefficient is allowed to change endogenously over time in response to unexpected excess returns under evolutionary forces. The same model, under constant risk aversion, would instead generate returns that are essentially Gaussian. We conclude that an endogenous time-varying risk aversion represents a very parsimonious way to make the model match real data on key statistical properties, and therefore deserves careful consideration from economists and practitioners alike.

  17. Leverage Aversion and Risk Parity

    DEFF Research Database (Denmark)

    Asness, Clifford; Frazzini, Andrea; Heje Pedersen, Lasse

    2012-01-01

    The authors show that leverage aversion changes the predictions of modern portfolio theory: Safer assets must offer higher risk-adjusted returns than riskier assets. Consuming the high risk-adjusted returns of safer assets requires leverage, creating an opportunity for investors with the ability...... to apply leverage. Risk parity portfolios exploit this opportunity by equalizing the risk allocation across asset classes, thus overweighting safer assets relative to their weight in the market portfolio....

  18. Human capital and risk aversion in relational incentive contracts

    International Nuclear Information System (INIS)

    Kvaloey, Ola

    2003-01-01

    This paper examines a self-enforced relational incentive contract between a risk neutral principal and a risk averse agent where the agent's human capital is essential in ex post realization of values. I analyse the effect of outside options on the optimal bonus level, showing how the presence of ex post outside options may impede desirable degrees of performance pay. The effect of risk aversion and incentive responsiveness is analysed by allowing for linear contracts. I show that the first order effect of these parameters are the same as in verifiable contracts, but second order effects show that the optimal bonus level's sensitivity to risk aversion and incentive responsiveness increases with the discount factor. The analysis has interesting implications on firm boundaries and specificity choices. (author)

  19. The Betrayal Aversion Elicitation Task: An Individual Level Betrayal Aversion Measure.

    Science.gov (United States)

    Aimone, Jason; Ball, Sheryl; King-Casas, Brooks

    2015-01-01

    Research on betrayal aversion shows that individuals' response to risk depends not only on probabilities and payoffs, but also on whether the risk includes a betrayal of trust. While previous studies focus on measuring aggregate levels of betrayal aversion, the connection between an individual's own betrayal aversion and other individually varying factors, including risk preferences, are currently unexplored. This paper develops a new task to elicit an individual's level of betrayal aversion that can then be compared to individual characteristics. We demonstrate the feasibility of our new task and show that our aggregate individual results are consistent with previous studies. We then use this classification to ask whether betrayal aversion is correlated with risk aversion. While we find risk aversion and betrayal aversion have no significant relationship, we do observe that risk aversion is correlated with non-social risk preferences, but not the social, betrayal related, risk component of the new task.

  20. Gender Differences in Risk Aversion Among Chinese University Students.

    Science.gov (United States)

    Lam, Desmond

    2015-12-01

    This paper examines gender differences in risk aversion among Chinese university students. Chinese females are proposed to be more risk averse and require a higher risk premium when faced with a gamble option in the gain-domain frame as compared to Chinese males. Two groups of 100 participants each (male = 100 and female = 100 in total) were recruited to fill up questionnaires that included items relating to objective probability lotteries. Within each group, it was found that Chinese males and females did not differ in their risk aversion. However, results show that Chinese males tend to react more readily to rising risk premium by taking up options with higher expected values when compared to Chinese females. Current findings will have useful implications to marketers (particularly, promoters of gambling products) and problem gambling counselors.

  1. Economic assessment of flood forecasts for a risk-averse decision-maker

    Science.gov (United States)

    Matte, Simon; Boucher, Marie-Amélie; Boucher, Vincent; Fortier-Filion, Thomas-Charles

    2017-04-01

    A large effort has been made over the past 10 years to promote the operational use of probabilistic or ensemble streamflow forecasts. It has also been suggested in past studies that ensemble forecasts might possess a greater economic value than deterministic forecasts. However, the vast majority of recent hydro-economic literature is based on the cost-loss ratio framework, which might be appealing for its simplicity and intuitiveness. One important drawback of the cost-loss ratio is that it implicitly assumes a risk-neutral decision maker. By definition, a risk-neutral individual is indifferent to forecasts' sharpness: as long as forecasts agree with observations on average, the risk-neutral individual is satisfied. A risk-averse individual, however, is sensitive to the level of precision (sharpness) of forecasts. This person is willing to pay to increase his or her certainty about future events. In fact, this is how insurance companies operate: the probability of seeing one's house burn down is relatively low, so the expected cost related to such event is also low. However, people are willing to buy insurance to avoid the risk, however small, of loosing everything. Similarly, in a context where people's safety and property is at stake, the typical decision maker is more risk-averse than risk-neutral. Consequently, the cost-loss ratio is not the most appropriate tool to assess the economic value of flood forecasts. This presentation describes a more realistic framework for assessing the economic value of such forecasts for flood mitigation purposes. Borrowing from economics, the Constant Absolute Risk Aversion utility function (CARA) is the central tool of this new framework. Utility functions allow explicitly accounting for the level of risk aversion of the decision maker and fully exploiting the information related to ensemble forecasts' uncertainty. Three concurrent ensemble streamflow forecasting systems are compared in terms of quality (comparison with

  2. Experimental evidence against the paradigm of mortality risk aversion.

    Science.gov (United States)

    Rheinberger, Christoph M

    2010-04-01

    This article deals with the question of how societal impacts of fatal accidents can be integrated into the management of natural or man-made hazards. Today, many governmental agencies give additional weight to the number of potential fatalities in their risk assessments to reflect society's aversion to large accidents. Although mortality risk aversion has been proposed in numerous risk management guidelines, there has been no evidence that lay people want public decisionmakers to overweight infrequent accidents of large societal consequences against more frequent ones of smaller societal consequences. Furthermore, it is not known whether public decisionmakers actually do such overweighting when they decide upon the mitigation of natural or technical hazards. In this article, we report on two experimental tasks that required participants to evaluate negative prospects involving 1-100 potential fatalities. Our results show that neither lay people nor hazard experts exhibit risk-averse behavior in decisions on mortality risks.

  3. Overcoming Learning Aversion in Evaluating and Managing Uncertain Risks.

    Science.gov (United States)

    Cox, Louis Anthony Tony

    2015-10-01

    Decision biases can distort cost-benefit evaluations of uncertain risks, leading to risk management policy decisions with predictably high retrospective regret. We argue that well-documented decision biases encourage learning aversion, or predictably suboptimal learning and premature decision making in the face of high uncertainty about the costs, risks, and benefits of proposed changes. Biases such as narrow framing, overconfidence, confirmation bias, optimism bias, ambiguity aversion, and hyperbolic discounting of the immediate costs and delayed benefits of learning, contribute to deficient individual and group learning, avoidance of information seeking, underestimation of the value of further information, and hence needlessly inaccurate risk-cost-benefit estimates and suboptimal risk management decisions. In practice, such biases can create predictable regret in selection of potential risk-reducing regulations. Low-regret learning strategies based on computational reinforcement learning models can potentially overcome some of these suboptimal decision processes by replacing aversion to uncertain probabilities with actions calculated to balance exploration (deliberate experimentation and uncertainty reduction) and exploitation (taking actions to maximize the sum of expected immediate reward, expected discounted future reward, and value of information). We discuss the proposed framework for understanding and overcoming learning aversion and for implementing low-regret learning strategies using regulation of air pollutants with uncertain health effects as an example. © 2015 Society for Risk Analysis.

  4. Model dependencies of risk aversion and working interest estimates

    International Nuclear Information System (INIS)

    Lerche, I.

    1996-01-01

    Working interest, W, and risk adjusted value, RAV, are evaluated using both Cozzolino's formula for exponential dependence of risk aversion and also for a hyperbolic tangent dependence. In addition, the general method is given of constructing an RAV formula for any functional choice of risk aversion dependence. Two examples are given to illustrate how the model dependencies influence choices of working interest and risk adjusted value depending on whether the expected value of the project is positive or negative. In general the Cozzolino formula provides a more conservative position for risk than does the hyperbolic tangent formula, reflecting the difference in corporate attitudes to risk aversion. The commonly used Cozzolino formula is shown to have simple exact arithmetic expressions for maximum working interest and maximum RAV; the hyperbolic tangent formula has approximate analytic expressions. Both formulae also yield approximate analytical expressions for the working interest yielding a risk neutral RAV of zero. These arithmetic results are useful for making quick estimates of working interest ranges and risk adjusted values. (Author)

  5. Five-year-olds do not show ambiguity aversion in a risk and ambiguity task with physical objects.

    Science.gov (United States)

    Li, Rosa; Roberts, Rachel C; Huettel, Scott A; Brannon, Elizabeth M

    2017-07-01

    Ambiguity aversion arises when a decision maker prefers risky gambles with known probabilities over equivalent ambiguous gambles with unknown probabilities. This phenomenon has been consistently observed in adults across a large body of empirical work. Evaluating ambiguity aversion in young children, however, has posed methodological challenges because probabilistic representations appropriate for adults might not be understood by young children. Here, we established a novel method for representing risk and ambiguity with physical objects that overcomes previous methodological limitations and allows us to measure ambiguity aversion in young children. We found that individual 5-year-olds exhibited consistent choice preferences and, as a group, exhibited no ambiguity aversion in a task that evokes ambiguity aversion in adults. Across individuals, 5-year-olds exhibited greater variance in ambiguity preferences compared with adults tested under similar conditions. This suggests that ambiguity aversion is absent during early childhood and emerges over the course of development. Copyright © 2017 Elsevier Inc. All rights reserved.

  6. Estimation of Esfarayen Farmers Risk Aversion Coefficient and Its Influencing Factors (Nonparametric Approach

    Directory of Open Access Journals (Sweden)

    Z. Nematollahi

    2016-03-01

    Full Text Available Introduction: Due to existence of the risk and uncertainty in agriculture, risk management is crucial for management in agriculture. Therefore the present study was designed to determine the risk aversion coefficient for Esfarayens farmers. Materials and Methods: The following approaches have been utilized to assess risk attitudes: (1 direct elicitation of utility functions, (2 experimental procedures in which individuals are presented with hypothetical questionnaires regarding risky alternatives with or without real payments and (3: Inference from observation of economic behavior. In this paper, we focused on approach (3: inference from observation of economic behavior, based on this assumption of existence of the relationship between the actual behavior of a decision maker and the behavior predicted from empirically specified models. A new non-parametric method and the QP method were used to calculate the coefficient of risk aversion. We maximized the decision maker expected utility with the E-V formulation (Freund, 1956. Ideally, in constructing a QP model, the variance-covariance matrix should be formed for each individual farmer. For this purpose, a sample of 100 farmers was selected using random sampling and their data about 14 products of years 2008- 2012 were assembled. The lowlands of Esfarayen were used since within this area, production possibilities are rather homogeneous. Results and Discussion: The results of this study showed that there was low correlation between some of the activities, which implies opportunities for income stabilization through diversification. With respect to transitory income, Ra, vary from 0.000006 to 0.000361 and the absolute coefficient of risk aversion in our sample were 0.00005. The estimated Ra values vary considerably from farm to farm. The results showed that the estimated Ra for the subsample existing of 'non-wealthy' farmers was 0.00010. The subsample with farmers in the 'wealthy' group had an

  7. The Role of Risk Aversion in Predicting Individual Behaviours

    OpenAIRE

    Guiso, Luigi; Paiella, Monica

    2004-01-01

    We use household survey data to construct a direct measure of absolute risk aversion based on the maximum price a consumer is willing to pay to buy a risky asset. We relate this measure to a set of consumers’ decisions that in theory should vary with attitude towards risk. We find that elicited risk aversion has considerable predictive power for a number of key household decisions such as choice of occupation, portfolio selection, moving decisions and exposure to chronic diseases in ways cons...

  8. The Role of Risk Aversion in Predicting Individual Behaviour

    OpenAIRE

    Monica Paiella; Luigi Guiso

    2004-01-01

    We use household survey data to construct a direct measure of absolute risk aversion based on the maximum price a consumer is willing to pay to buy a risky asset. We relate this measure to a set of consumers' decisions that in theory should vary with attitude towards risk. We find that elicited risk aversion has considerable predictive power for a number of key household decisions such as choice of occupation, portfolio selection, moving decisions and exposure to chronic diseases in ways cons...

  9. Managing Risk Aversion for Low-Carbon Supply Chains with Emission Abatement Outsourcing.

    Science.gov (United States)

    Wang, Qinpeng; He, Longfei

    2018-02-21

    Reducing carbon emissions, including emission abatement outsourcing at the supply-chain level, is becoming a significant but challenging problem in practice. Confronting this challenge, we therefore break down the practice to focus on a low-carbon supply chain consisting of one supplier, one manufacturer and one third-party emission-reducing contractor. The contractor offers a carbon reduction service to the manufacturer. In view of the increasing proportion of Greenhouse Gases (GHG) emissions and absence of carbon reduction policies in developing countries, we adopt the prospect of consumers' low-carbon preferences to capture the demand sensitivity on carbon emission. By exploiting the Mean-Variance (MV) model, we develop a supply chain game model considering risk aversion. Comparing the supply chain performances of the cases under risk neutrality and risk aversion, we investigate the impact of the risk aversion of the supplier and the manufacturer on the low-carbon supply chain performances, respectively. We show that the risk aversion of chain members will not influence the relationship underlain by the profit-sharing contract between the manufacturer and contractor, whereas they may extend the supplier's concerning range. Although the manufacturer's risk aversion has a positive impact on the wholesale price, interestingly, the supplier's impact on the wholesale price is negative. Furthermore, we propose a contract to coordinate the risk-averse low-carbon supply chain by tuning the aversion levels of the supplier and the manufacturer, respectively. Through numerical study, we draw on managerial insights for industrial practitioners to adopt a low carbon strategy potentially by managing the risk attitudes along the supply chain channel.

  10. Feasible sets, comparative risk aversion, and comparative uncertainty aversion in bargaining

    NARCIS (Netherlands)

    Driesen, B.W.I.; Lombardi, M.; Peters, H.J.M.

    2015-01-01

    We study feasible sets of the bargaining problem under two different assumptions: the players are subjective expected utility maximizers or the players are Choquet expected utility maximizers. For the latter case, we consider the effects on bargaining solutions when players become more risk averse

  11. A Survey Data Response to the Teaching of Utility Curves and Risk Aversion

    Science.gov (United States)

    Hobbs, Jeffrey; Sharma, Vivek

    2011-01-01

    In many finance and economics courses as well as in practice, the concept of risk aversion is reduced to the standard deviation of returns, whereby risk-averse investors prefer to minimize their portfolios' standard deviations. In reality, the concept of risk aversion is richer and more interesting than this, and can easily be conveyed through…

  12. THE ROLE OF RISK AVERSION IN PREDICTING INDIVIDUAL BEHAVIOR

    OpenAIRE

    Luigi Guiso; Monica Paiella

    2005-01-01

    We use household survey data to construct a direct measure of absolute risk aversion based on the maximum price a consumer is willing to pay to buy a risky asset. We relate this measure to a set of consumers� decisions that in theory should vary with attitude towards risk. We find that elicited risk aversion has considerable predictive power for a number of key household decisions such as choice of occupation, portfolio selection, moving decisions and exposure to chronic diseases in ways co...

  13. Risk Aversion: As Perceived by U.S. and Swedish Officers

    Science.gov (United States)

    2011-06-10

    marginalized traditional morality . (Furedi 1997, 153f) The value of risk aversion means to not put people at risk and to regulate behavior. The main...difference compared to traditional morality lies in the individualistic orientation of risk aversion (Furedi 1997, 163) Ulrich Beck German Professor of...that distinguishes one group of people from another (Hofstede 2005, 3ff). Studying differences in culture demands a position of cultural relativism

  14. Managing Risk Aversion for Low-Carbon Supply Chains with Emission Abatement Outsourcing

    Science.gov (United States)

    Wang, Qinpeng; He, Longfei

    2018-01-01

    Reducing carbon emissions, including emission abatement outsourcing at the supply-chain level, is becoming a significant but challenging problem in practice. Confronting this challenge, we therefore break down the practice to focus on a low-carbon supply chain consisting of one supplier, one manufacturer and one third-party emission-reducing contractor. The contractor offers a carbon reduction service to the manufacturer. In view of the increasing proportion of Greenhouse Gases (GHG) emissions and absence of carbon reduction policies in developing countries, we adopt the prospect of consumers’ low-carbon preferences to capture the demand sensitivity on carbon emission. By exploiting the Mean-Variance (MV) model, we develop a supply chain game model considering risk aversion. Comparing the supply chain performances of the cases under risk neutrality and risk aversion, we investigate the impact of the risk aversion of the supplier and the manufacturer on the low-carbon supply chain performances, respectively. We show that the risk aversion of chain members will not influence the relationship underlain by the profit-sharing contract between the manufacturer and contractor, whereas they may extend the supplier’s concerning range. Although the manufacturer’s risk aversion has a positive impact on the wholesale price, interestingly, the supplier’s impact on the wholesale price is negative. Furthermore, we propose a contract to coordinate the risk-averse low-carbon supply chain by tuning the aversion levels of the supplier and the manufacturer, respectively. Through numerical study, we draw on managerial insights for industrial practitioners to adopt a low carbon strategy potentially by managing the risk attitudes along the supply chain channel. PMID:29466281

  15. Managing Risk Aversion for Low-Carbon Supply Chains with Emission Abatement Outsourcing

    Directory of Open Access Journals (Sweden)

    Qinpeng Wang

    2018-02-01

    Full Text Available Reducing carbon emissions, including emission abatement outsourcing at the supply-chain level, is becoming a significant but challenging problem in practice. Confronting this challenge, we therefore break down the practice to focus on a low-carbon supply chain consisting of one supplier, one manufacturer and one third-party emission-reducing contractor. The contractor offers a carbon reduction service to the manufacturer. In view of the increasing proportion of Greenhouse Gases (GHG emissions and absence of carbon reduction policies in developing countries, we adopt the prospect of consumers’ low-carbon preferences to capture the demand sensitivity on carbon emission. By exploiting the Mean-Variance (MV model, we develop a supply chain game model considering risk aversion. Comparing the supply chain performances of the cases under risk neutrality and risk aversion, we investigate the impact of the risk aversion of the supplier and the manufacturer on the low-carbon supply chain performances, respectively. We show that the risk aversion of chain members will not influence the relationship underlain by the profit-sharing contract between the manufacturer and contractor, whereas they may extend the supplier’s concerning range. Although the manufacturer’s risk aversion has a positive impact on the wholesale price, interestingly, the supplier’s impact on the wholesale price is negative. Furthermore, we propose a contract to coordinate the risk-averse low-carbon supply chain by tuning the aversion levels of the supplier and the manufacturer, respectively. Through numerical study, we draw on managerial insights for industrial practitioners to adopt a low carbon strategy potentially by managing the risk attitudes along the supply chain channel.

  16. Risk-Averse Evolutionary Game Model of Aviation Joint Emergency Response

    Directory of Open Access Journals (Sweden)

    Wei Pan

    2016-01-01

    Full Text Available We study effects of risk-averse attitude of both participators in aviation joint emergency response on the coevolution of cooperation mechanisms and individual preferences between airport and nonprofit organization. First, based on the current aviation joint emergency mechanism in China, we put forward two mechanisms to select the joint nonprofit organization, including reputation cooperation and bidding competition. Meanwhile, we consider two preferences including altruism and selfishness. Then we build replicator dynamics equations using the theory of conditional value-at-risk (CVaR taking risk aversion attitude into account. Finally, we introduce the factor of government and give all participators some suggestions. We show that the risk-averse attitude of the other game participator affects the one participator’s decision and the effects subject to some parameters.

  17. Optimal fuel-mix in CHP plants under a stochastic permit price. Risk-neutrality versus risk-aversion

    International Nuclear Information System (INIS)

    Lappi, Pauli; Ollikka, Kimmo; Ollikainen, Markku

    2010-01-01

    This paper studies the optimal fuel-mix of a CHP producer under emission permit price risk. The producer's multi-fuel plant uses two CO 2 -intensive fuels and one clean fuel. Using a mean-variance framework we develop three models. The models are divided into spot-models (risk neutral and risk averse cases) and a forward-model (risk averse case). We derive the effects of price risk on optimal fuel use. An increase in price risk can in fact increase the use of CO 2 -intensive fuel in the spot-model. In the forward-model, the production and financial decisions are separate. We also evaluate the risk-bearing behavior of seven Finnish CHP producers. We found that risk-neutrality describes behavior better than risk-aversion. (author)

  18. Risk aversion and religious behaviour

    DEFF Research Database (Denmark)

    Nielsen, Jytte Seested; Bech, Mickael; Christensen, Kaare

    2017-01-01

    would expect that risk averse individuals would demand a more generous protection plan which they may do by devoting more effort and resources into religious activities such as church attendance and prayer, which seems to be in accordance with previous empirical results. However, a general concern...... and prayer frequency on the other controlling for unobservable variables using survey data of Danish same-sex twin pairs. We verify the correlation between risk preferences and religion found previously by carrying out cross-sectional analyses. We also show that the association between risk attitudes...

  19. Joint measurement of risk aversion, prudence, and temperance

    NARCIS (Netherlands)

    Ebert, S.; Wiesen, D.

    Risk aversion—but also the higher-order risk preferences of prudence and temperance—are fundamental concepts in the study of economic decision making. We propose a method to jointly measure the intensity of risk aversion, prudence, and temperance. Our theoretical approach is to define risk

  20. Optimal fuel-mix in CHP plants under a stochastic permit price. Risk-neutrality versus risk-aversion

    Energy Technology Data Exchange (ETDEWEB)

    Lappi, Pauli; Ollikka, Kimmo; Ollikainen, Markku [Department of Economics and Management, P.O. Box 27, University of Helsinki, FIN-00014 Helsinki (Finland)

    2010-02-15

    This paper studies the optimal fuel-mix of a CHP producer under emission permit price risk. The producer's multi-fuel plant uses two CO{sub 2}-intensive fuels and one clean fuel. Using a mean-variance framework we develop three models. The models are divided into spot-models (risk neutral and risk averse cases) and a forward-model (risk averse case). We derive the effects of price risk on optimal fuel use. An increase in price risk can in fact increase the use of CO{sub 2}-intensive fuel in the spot-model. In the forward-model, the production and financial decisions are separate. We also evaluate the risk-bearing behavior of seven Finnish CHP producers. We found that risk-neutrality describes behavior better than risk-aversion. (author)

  1. Optimal fuel-mix in CHP plants under a stochastic permit price: Risk-neutrality versus risk-aversion

    Energy Technology Data Exchange (ETDEWEB)

    Lappi, Pauli, E-mail: pauli.lappi@helsinki.f [Department of Economics and Management, P.O. Box 27, University of Helsinki, FIN-00014 Helsinki (Finland); Ollikka, Kimmo, E-mail: kimmo.ollikka@helsinki.f [Department of Economics and Management, P.O. Box 27, University of Helsinki, FIN-00014 Helsinki (Finland); Ollikainen, Markku, E-mail: markku.ollikainen@helsinki.f [Department of Economics and Management, P.O. Box 27, University of Helsinki, FIN-00014 Helsinki (Finland)

    2010-02-15

    This paper studies the optimal fuel-mix of a CHP producer under emission permit price risk. The producer's multi-fuel plant uses two CO{sub 2}-intensive fuels and one clean fuel. Using a mean-variance framework we develop three models. The models are divided into spot-models (risk neutral and risk averse cases) and a forward-model (risk averse case). We derive the effects of price risk on optimal fuel use. An increase in price risk can in fact increase the use of CO{sub 2}-intensive fuel in the spot-model. In the forward-model, the production and financial decisions are separate. We also evaluate the risk-bearing behavior of seven Finnish CHP producers. We found that risk-neutrality describes behavior better than risk-aversion.

  2. Quantifying uncertainty in pest risk maps and assessments: adopting a risk-averse decision maker’s perspective

    Directory of Open Access Journals (Sweden)

    Denys Yemshanov

    2013-09-01

    Full Text Available Pest risk maps are important decision support tools when devising strategies to minimize introductions of invasive organisms and mitigate their impacts. When possible management responses to an invader include costly or socially sensitive activities, decision-makers tend to follow a more certain (i.e., risk-averse course of action. We presented a new mapping technique that assesses pest invasion risk from the perspective of a risk-averse decision maker.We demonstrated the method by evaluating the likelihood that an invasive forest pest will be transported to one of the U.S. states or Canadian provinces in infested firewood by visitors to U.S. federal campgrounds. We tested the impact of the risk aversion assumption using distributions of plausible pest arrival scenarios generated with a geographically explicit model developed from data documenting camper travel across the study area. Next, we prioritized regions of high and low pest arrival risk via application of two stochastic ordering techniques that employed, respectively, first- and second-degree stochastic dominance rules, the latter of which incorporated the notion of risk aversion. We then identified regions in the study area where the pest risk value changed considerably after incorporating risk aversion.While both methods identified similar areas of highest and lowest risk, they differed in how they demarcated moderate-risk areas. In general, the second-order stochastic dominance method assigned lower risk rankings to moderate-risk areas. Overall, this new method offers a better strategy to deal with the uncertainty typically associated with risk assessments and provides a tractable way to incorporate decision-making preferences into final risk estimates, and thus helps to better align these estimates with particular decision-making scenarios about a pest organism of concern. Incorporation of risk aversion also helps prioritize the set of locations to target for inspections and

  3. Household portfolios and implicit risk aversion

    NARCIS (Netherlands)

    Bucciol, A.; Miniaci, R.

    2008-01-01

    We derive from a sample of US households the distribution of the risk aversion implicit in their portfolio choice. Our estimate minimizes the distance between the certainty equivalent return generated with observed portfolios and portfolios that are optimal in a mean-variance framework. Taking into

  4. Heterogenous Intertemporal Elasticity of Substitution and Relative Risk Aversion

    DEFF Research Database (Denmark)

    Khorunzhina, Natalia; Gayle, Wayne-Roy

    This paper investigates the existence and degree of variation across house holds and over time in the intertemporal elasticity of substitution (IES) and the coefficient of relative risk aversion (RRA) that is generated by habit forming preferences. To do so, we develop a new nonlinear GMM estimator...... in food consumption. Using these estimates, we develop bounds for the expectation of the implied heterogenous intertemporal elasticity of substitution and relative risk aversion that account for measurement errors and compute asymptotically valid confidence intervals on these bounds. We find...

  5. Optimal Ordering Policy of a Risk-Averse Retailer Subject to Inventory Inaccuracy

    Directory of Open Access Journals (Sweden)

    Lijing Zhu

    2013-01-01

    Full Text Available Inventory inaccuracy refers to the discrepancy between the actual inventory and the recorded inventory information. Inventory inaccuracy is prevalent in retail stores. It may result in a higher inventory level or poor customer service. Earlier studies of inventory inaccuracy have traditionally assumed risk-neutral retailers whose objective is to maximize expected profits. We investigate a risk-averse retailer within a newsvendor framework. The risk aversion attitude is measured by conditional-value-at-risk (CVaR. We consider inventory inaccuracy stemming both from permanent shrinkage and temporary shrinkage. Two scenarios of reducing inventory shrinkage are presented. In the first scenario, the retailer conducts physical inventory audits to identify the discrepancy. In the second scenario, the retailer deploys an automatic tracking technology, radiofrequency identification (RFID, to reduce inventory shrinkage. With the CVaR criterion, we propose optimal policies for the two scenarios. We show monotonicity between the retailer’s ordering policy and his risk aversion degree. A numerical analysis provides managerial insights for risk-averse retailers considering investing in RFID technology.

  6. Low- and high-testosterone individuals exhibit decreased aversion to economic risk.

    Science.gov (United States)

    Stanton, Steven J; Mullette-Gillman, O'Dhaniel A; McLaurin, R Edward; Kuhn, Cynthia M; LaBar, Kevin S; Platt, Michael L; Huettel, Scott A

    2011-04-01

    Testosterone is positively associated with risk-taking behavior in social domains (e.g., crime, physical aggression). However, the scant research linking testosterone to economic risk preferences presents inconsistent findings. We examined the relationship between endogenous testosterone and individuals' economic preferences (i.e., risk preference, ambiguity preference, and loss aversion) in a large sample (N = 298) of men and women. We found that endogenous testosterone levels have a significant U-shaped association with individuals' risk and ambiguity preferences, but not loss aversion. Specifically, individuals with low or high levels of testosterone (more than 1.5 SD from the mean for their gender) were risk and ambiguity neutral, whereas individuals with intermediate levels of testosterone were risk and ambiguity averse. This relationship was highly similar in men and women. In contrast to received wisdom regarding testosterone and risk, the present data provide the first robust evidence for a nonlinear association between economic preferences and levels of endogenous testosterone.

  7. Measuring Risk Aversion for Nuclear Power Plant Accident: Results of Contingent Valuation Survey in Korea

    International Nuclear Information System (INIS)

    Lee, Sang Hun; Kang, Hyun Gook

    2015-01-01

    Within the evaluation of the external cost of nuclear energy, the estimation of the external cost of nuclear power plant (NPP) severe accident is one of the major topics to be addressed. For the evaluation of the external cost of NPP severe accident, the effect of public risk averse behavior against the group accidents, such as NPP accident, dam failure, must be addressed. Although the equivalent fatalities from a single group accident are not common and its risk is very small compared to other accidents, people perceive the group accident more seriously. In other words, people are more concerned about low probability/high consequence events than about high probability/low consequence events having the same mean damage. One of the representative method to integrate the risk aversion in the external costs of severe nuclear reactor accidents was developed by Eeckoudt et al., and he used the risk aversion coefficient, mainly based on the analysis of financial risks in the stock markets to evaluate the external cost of nuclear severe accident. However, the use of financial risk aversion coefficient to nuclear severe accidents is not appropriate, because financial risk and nuclear severe accident risk are entirely different. In this paper, the individual-level survey was conducted to measure the risk aversion coefficient and estimate the multiplication factor to integrate the risk aversion in the external costs of NPP severe accident. This study propose an integrated framework on estimation of the external cost associated with severe accidents of NPP considering public risk aversion behavior. The theoretical framework to estimate the risk aversion coefficient/multiplication factor and to assess economic damages from a hypothetical NPP accident was constructed. Based on the theoretical framework, the risk aversion coefficient can be analyzed by conducting public survey with a carefully designed lottery questions. Compared to the previous studies on estimation of the

  8. Measuring Risk Aversion for Nuclear Power Plant Accident: Results of Contingent Valuation Survey in Korea

    Energy Technology Data Exchange (ETDEWEB)

    Lee, Sang Hun; Kang, Hyun Gook [KAIST, Daejeon (Korea, Republic of)

    2015-05-15

    Within the evaluation of the external cost of nuclear energy, the estimation of the external cost of nuclear power plant (NPP) severe accident is one of the major topics to be addressed. For the evaluation of the external cost of NPP severe accident, the effect of public risk averse behavior against the group accidents, such as NPP accident, dam failure, must be addressed. Although the equivalent fatalities from a single group accident are not common and its risk is very small compared to other accidents, people perceive the group accident more seriously. In other words, people are more concerned about low probability/high consequence events than about high probability/low consequence events having the same mean damage. One of the representative method to integrate the risk aversion in the external costs of severe nuclear reactor accidents was developed by Eeckoudt et al., and he used the risk aversion coefficient, mainly based on the analysis of financial risks in the stock markets to evaluate the external cost of nuclear severe accident. However, the use of financial risk aversion coefficient to nuclear severe accidents is not appropriate, because financial risk and nuclear severe accident risk are entirely different. In this paper, the individual-level survey was conducted to measure the risk aversion coefficient and estimate the multiplication factor to integrate the risk aversion in the external costs of NPP severe accident. This study propose an integrated framework on estimation of the external cost associated with severe accidents of NPP considering public risk aversion behavior. The theoretical framework to estimate the risk aversion coefficient/multiplication factor and to assess economic damages from a hypothetical NPP accident was constructed. Based on the theoretical framework, the risk aversion coefficient can be analyzed by conducting public survey with a carefully designed lottery questions. Compared to the previous studies on estimation of the

  9. Random queues and risk averse users

    DEFF Research Database (Denmark)

    de Palma, André; Fosgerau, Mogens

    2013-01-01

    We analyze Nash equilibrium in time of use of a congested facility. Users are risk averse with general concave utility. Queues are subject to varying degrees of random sorting, ranging from strict queue priority to a completely random queue. We define the key “no residual queue” property, which...

  10. Neural correlates of value, risk, and risk aversion contributing to decision making under risk.

    Science.gov (United States)

    Christopoulos, George I; Tobler, Philippe N; Bossaerts, Peter; Dolan, Raymond J; Schultz, Wolfram

    2009-10-07

    Decision making under risk is central to human behavior. Economic decision theory suggests that value, risk, and risk aversion influence choice behavior. Although previous studies identified neural correlates of decision parameters, the contribution of these correlates to actual choices is unknown. In two different experiments, participants chose between risky and safe options. We identified discrete blood oxygen level-dependent (BOLD) correlates of value and risk in the ventral striatum and anterior cingulate, respectively. Notably, increasing inferior frontal gyrus activity to low risk and safe options correlated with higher risk aversion. Importantly, the combination of these BOLD responses effectively decoded the behavioral choice. Striatal value and cingulate risk responses increased the probability of a risky choice, whereas inferior frontal gyrus responses showed the inverse relationship. These findings suggest that the BOLD correlates of decision factors are appropriate for an ideal observer to detect behavioral choices. More generally, these biological data contribute to the validity of the theoretical decision parameters for actual decisions under risk.

  11. Twins less frequent than expected among male births in risk averse populations.

    Science.gov (United States)

    Karasek, Deborah; Goodman, Julia; Gemmill, Alison; Falconi, April; Hartig, Terry; Magganas, Aristotle; Catalano, Ralph

    2015-06-01

    Male twin gestations exhibit higher incidence of fetal morbidity and mortality than singleton gestations. From an evolutionary perspective, the relatively high rates of infant and child mortality among male twins born into threatening environments reduce the fitness of these gestations, making them more vulnerable to fetal loss. Women do not perceive choosing to spontaneously abort gestations although the outcome may result from estimates, made without awareness, of the risks of continuing a pregnancy. Here, we examine whether the non-conscious decisional biology of gestation can be linked to conscious risk aversion. We test this speculation by measuring the association between household surveys in Sweden that gauge financial risk aversion in the population and the frequency of twins among live male births. We used time-series regression methods to estimate our suspected associations and Box-Jenkins modeling to ensure that autocorrelation did not confound the estimation or reduce its efficiency. We found, consistent with theory, that financial risk aversion in the population correlates inversely with the odds of a twin among Swedish males born two months later. The odds of a twin among males fell by approximately 3.5% two months after unexpectedly great risk aversion in the population. This work implies that shocks that affect population risk aversion carry implications for fetal loss in vulnerable twin pregnancies.

  12. Does Market Experience Attenuate Risk Aversion? Evidence from Landed Farm Households in Ethiopia

    NARCIS (Netherlands)

    Melesse, Mequanint Biset; Cecchi, Francesco

    2017-01-01

    Risk preferences are important drivers of many relevant economic decisions of farm households. High risk aversion is a well-known trigger of "poverty traps" for farm households in developing countries. This paper analyzes the effect of market experience on risk aversion for a relatively large sample

  13. Does Market Experience Attenuate Risk Aversion? Evidence from Landed Farm Households in Ethiopia

    NARCIS (Netherlands)

    Melesse, Mequanint B.; Cecchi, Francesco

    2017-01-01

    Risk preferences are important drivers of many relevant economic decisions of farm households. High risk aversion is a well-known trigger of "poverty traps" for farm households in developing countries. This paper analyzes the effect of market experience on risk aversion for a relatively large

  14. Cross-sectional survey: risk-averse French general practitioners are more favorable toward influenza vaccination.

    Science.gov (United States)

    Massin, Sophie; Ventelou, Bruno; Nebout, Antoine; Verger, Pierre; Pulcini, Céline

    2015-01-29

    We tested the following hypotheses: (i) risk-averse general practitioners (GPs) are more likely to be vaccinated against influenza; (ii) and risk-averse GPs recommend influenza vaccination more often to their patients. In risk-averse GPs, the perceived benefits of the vaccine and/or the perceived risks of the infectious disease might indeed outweigh the perceived risks of the vaccine. In 2010-2012, we conducted a cross-sectional survey of a nationwide French representative sample of 1136 GPs. Multivariate analyses adjusted for four stratification variables (age, gender, urban/suburban/rural practice location and annual patient consultations) and for GPs' characteristics (group/solo practice, and occasional practice of alternative medicine, e.g., homeopathy) looked for associations between their risk attitudes and self-reported vaccination behavior. Individual risk attitudes were expressed as a continuous variable, from 0 (risk-tolerant) to 10 (risk-averse). Overall, 69% of GPs reported that they were very favorable toward vaccination in general. Self-reported vaccination coverage was 78% for 2009/2010 seasonal influenza and 62% for A/H1N1 pandemic influenza. Most GPs (72%) reported recommending the pandemic influenza vaccination to at-risk young adults in 2009, but few than half (42%) to young adults not at risk. In multivariate analyses, risk-averse GPs were more often vaccinated against seasonal (marginal effect=1.3%, P=0.02) and pandemic influenza (marginal effect=1.5%, P=0.02). Risk-averse GPs recommended the pandemic influenza vaccination more often than their more risk-tolerant colleagues to patients without risk factors (marginal effect=1.7%, P=0.01), but not to their at-risk patients and were more favorable toward vaccination in general (marginal effect=1.5%, P=0.04). Individual risk attitudes may influence GPs' practices regarding influenza vaccination, both for themselves and their patients. Our results suggest that risk-averse GPs may perceive the risks

  15. Effect of risk aversion on prioritizing conservation projects.

    Science.gov (United States)

    Tulloch, Ayesha I T; Maloney, Richard F; Joseph, Liana N; Bennett, Joseph R; Di Fonzo, Martina M I; Probert, William J M; O'Connor, Shaun M; Densem, Jodie P; Possingham, Hugh P

    2015-04-01

    Conservation outcomes are uncertain. Agencies making decisions about what threat mitigation actions to take to save which species frequently face the dilemma of whether to invest in actions with high probability of success and guaranteed benefits or to choose projects with a greater risk of failure that might provide higher benefits if they succeed. The answer to this dilemma lies in the decision maker's aversion to risk--their unwillingness to accept uncertain outcomes. Little guidance exists on how risk preferences affect conservation investment priorities. Using a prioritization approach based on cost effectiveness, we compared 2 approaches: a conservative probability threshold approach that excludes investment in projects with a risk of management failure greater than a fixed level, and a variance-discounting heuristic used in economics that explicitly accounts for risk tolerance and the probabilities of management success and failure. We applied both approaches to prioritizing projects for 700 of New Zealand's threatened species across 8303 management actions. Both decision makers' risk tolerance and our choice of approach to dealing with risk preferences drove the prioritization solution (i.e., the species selected for management). Use of a probability threshold minimized uncertainty, but more expensive projects were selected than with variance discounting, which maximized expected benefits by selecting the management of species with higher extinction risk and higher conservation value. Explicitly incorporating risk preferences within the decision making process reduced the number of species expected to be safe from extinction because lower risk tolerance resulted in more species being excluded from management, but the approach allowed decision makers to choose a level of acceptable risk that fit with their ability to accommodate failure. We argue for transparency in risk tolerance and recommend that decision makers accept risk in an adaptive management

  16. Personality, risk aversion and speeding: an empirical investigation.

    Science.gov (United States)

    Greaves, Stephen P; Ellison, Adrian B

    2011-09-01

    Evidence suggests that in addition to demographics, there are strong relationships between facets of drivers' personality (e.g., aggression, thrill-seeking, altruism), aversion to risk and driving behaviour, particularly speeding. However, evidence is muted by the reliance on self-reported driving behaviour, which is thought to not accurately reflect actual driving behaviour. This paper reports on a study of 133 drivers in Sydney, who were asked to complete a short survey to develop their personality and risk aversion profiles and self-reported speeding behaviour. A Global Positioning System (GPS) device was then installed in their vehicle for several weeks as part of a major investigation of driving behaviour from which empirical measures of speeding are derived. Among the most pertinent findings are: (1) the tendency for drivers to both under and over-estimate their propensity to speed, (2) significant heterogeneity in speeding with a small, but notable number of drivers exceeding the limit for more than 20 percent of the distance driven, (3) weak relationships between the personality/risk-aversion measures and actual speeding, and (4) the suggestion that different personality traits appear to influence behaviour in different situations both from self-reported and actual speeding behaviour. Copyright © 2011 Elsevier Ltd. All rights reserved.

  17. Decisions during Negatively-Framed Messages Yield Smaller Risk-Aversion-Related Brain Activation in Substance-Dependent Individuals

    Science.gov (United States)

    Fukunaga, Rena; Bogg, Tim; Finn, Peter R.; Brown, Joshua W.

    2012-01-01

    A sizable segment of addiction research investigates the effects of persuasive message appeals on risky and deleterious behaviors. However, to date, little research has examined how various forms of message framing and corresponding behavioral choices might by mediated by risk-related brain regions. Using event-related functional magnetic resonance imaging, we investigated brain regions hypothesized to mediate the influence of message appeals on decision making in substance-dependent (SD) compared to non-substance-dependent (non-SD) individuals. The Iowa Gambling Task (IGT) was modified to include positively-framed, negatively-framed, and control messages about long-term deck payoffs. In the positively-framed condition, the SD and non-SD groups showed improved decision-making performance that corresponded to higher risk-aversion-related brain activity in the anterior cingulate cortex (ACC) and anterior insula (AI). In contrast, in the negatively-framed condition, the SD group showed poorer performance that corresponded to lower risk-aversion-related brain activity in the AI region. In addition, only the non-SD group showed a positive association between decision quality and greater risk-related activity in the ACC, regardless of message type. The findings suggest substance-dependent individuals may have reduced neurocognitive sensitivity in the ACC and AI regions involved in risk perception and aversion during decision-making, especially in response to framed messages that emphasize reduced prospects for long-term gains. PMID:23148798

  18. The neural basis of loss aversion in decision-making under risk.

    Science.gov (United States)

    Tom, Sabrina M; Fox, Craig R; Trepel, Christopher; Poldrack, Russell A

    2007-01-26

    People typically exhibit greater sensitivity to losses than to equivalent gains when making decisions. We investigated neural correlates of loss aversion while individuals decided whether to accept or reject gambles that offered a 50/50 chance of gaining or losing money. A broad set of areas (including midbrain dopaminergic regions and their targets) showed increasing activity as potential gains increased. Potential losses were represented by decreasing activity in several of these same gain-sensitive areas. Finally, individual differences in behavioral loss aversion were predicted by a measure of neural loss aversion in several regions, including the ventral striatum and prefrontal cortex.

  19. Impact of Risk Aversion on Price and Quality Decisions under Demand Uncertainty via the CARA Utility Function

    Directory of Open Access Journals (Sweden)

    Qinqin Li

    2014-01-01

    Full Text Available This paper investigates optimal price and quality decisions of a manufacturer-retailer supply chain under demand uncertainty, in which players are both risk-averse decision makers. The manufacturer determines the wholesale price and quality of the product, and the retailer determines the retail price. By means of game theory, we employ the constant absolute risk aversion (CARA function to analyze two different supply chain structures, that is, manufacturer Stackelberg model (MS and retailer Stackelberg model (RS. We then analyze the results to explore the effects of risk aversion of the manufacturer and the retailer upon the equilibrium decisions. Our results imply that both the risk aversion of the manufacturer and the retailer play an important role in the price and quality decisions. We find that, in general, in MS and RS models, the optimal wholesale price and quality decrease with the risk aversion of the manufacturer but increase with the risk aversion of the retailer, while the retail price decreases with the risk aversion of the manufacturer as well as the retailer. We also examine the impact of quality cost coefficient on the optimal decisions. Finally, numerical examples are presented to illustrate the different degree of effects of players’ risk aversion on equilibrium results and to compare results in different models considered.

  20. Risk aversion and willingness to pay for water quality: The case of non-farm rural residents.

    Science.gov (United States)

    Larue, Bruno; West, Gale E; Singbo, Alphonse; Tamini, Lota Dabio

    2017-07-15

    Stated choice experiments are used to investigate the economic valuation of rural residents living in the province of Quebec for water quality improvements. In Quebec, rural residents played an important role in the setting of stricter environmental regulations. Unlike most stated choice experiments about the valuation of improvements in water quality, this study explicitly accounts for risk in the design and analysis of choice experiments. Risk in phosphorus and coliform reductions is introduced through a three-point uniform distribution in the choice sets. The results show greater support for constant absolute risk aversion preferences than for constant relative risk aversion. Rural residents value coliform and phosphorus reductions and the more educated ones are particularly willing to see the government tax farmers and taxpayers to secure such reductions. As the science improves and risk in water quality outcomes decrease and as the political weight of non-farm rural residents increase, it should be easier for governments to replace voluntary cost-share programs by polluter-payer programs. Copyright © 2017 Elsevier Ltd. All rights reserved.

  1. Risk Aversion and Skewness Preference: a comment

    NARCIS (Netherlands)

    G.T. Post (Thierry); P. van Vliet (Pim)

    2003-01-01

    textabstractEmpirically, co-skewness of asset returns seems to explain a substantial part of the cross-sectional variation of mean return not explained by beta. Thisfinding is typically interpreted in terms of a risk averse representativeinvestor with a cubic utility function. This comment questions

  2. Risk aversion affects economic values of blue fox breeding scheme.

    Science.gov (United States)

    Peura, J; Kempe, R; Strandén, I; Rydhmer, L

    2016-12-01

    The profit and production of an average Finnish blue fox farm was simulated using a deterministic bio-economic farm model. Risk was included using Arrow-Prat absolute risk aversion coefficient and profit variance. Risk-rated economic values were calculated for pregnancy rate, litter loss, litter size, pelt size, pelt quality, pelt colour clarity, feed efficiency and eye infection. With high absolute risk aversion, economic values were lower than with low absolute risk aversion. Economic values were highest for litter loss (18.16 and 26.42 EUR), litter size (13.27 and 19.40 EUR), pregnancy (11.99 and 18.39 EUR) and eye infection (12.39 and 13.81 EUR). Sensitivity analysis showed that selection pressure for improved eye health depended strongly on proportion of culled animals among infected animals and much less on the proportion of infected animals. The economic value of feed efficiency was lower than expected (6.06 and 8.03 EUR). However, it was almost the same magnitude as pelt quality (7.30 and 7.30 EUR) and higher than the economic value of pelt size (3.37 and 5.26 EUR). Risk factors should be considered in blue fox breeding scheme because they change the relative importance of traits. © 2016 Blackwell Verlag GmbH.

  3. Averse to Initiative: Risk Management’s Effect on Mission Command

    Science.gov (United States)

    2017-05-25

    Master’s Thesis 3. DATES COVERED (From - To) JUN 2016 – MAY 2017 4. TITLE AND SUBTITLE Averse to Initiative: Risk Management’s Effect on Mission...decision weights and potential implications of educating leaders with Prospect Theory . Prospect Theory sheds light on how to look at loss and opportunity...the gain–causing risk aversion. Leaders educated in how to analyze a problem using Prospect Theory can rationally approach gains and losses. For the

  4. Incidental fear cues increase monetary loss aversion.

    Science.gov (United States)

    Schulreich, Stefan; Gerhardt, Holger; Heekeren, Hauke R

    2016-04-01

    In many everyday decisions, people exhibit loss aversion-a greater sensitivity to losses relative to gains of equal size. Loss aversion is thought to be (at least partly) mediated by emotional--in particular, fear-related--processes. Decision research has shown that even incidental emotions, which are unrelated to the decision at hand, can influence decision making. The effect of incidental fear on loss aversion, however, is thus far unclear. In two studies, we experimentally investigated how incidental fear cues, presented during (Study 1) or before (Study 2) choices to accept or reject mixed gambles over real monetary stakes, influence monetary loss aversion. We find that the presentation of fearful faces, relative to the presentation of neutral faces, increased risk aversion-an effect that could be attributed to increased loss aversion. The size of this effect was moderated by psychopathic personality: Fearless dominance, in particular its interpersonal facet, but not self-centered impulsivity, attenuated the effect of incidental fear cues on loss aversion, consistent with reduced fear reactivity. Together, these results highlight the sensitivity of loss aversion to the affective context. (c) 2016 APA, all rights reserved).

  5. Loss Aversion in the Laboratory

    OpenAIRE

    Morrison, William G.; Oxoby, Robert J.

    2014-01-01

    We report the results of a laboratory experiment testing for the existence of loss aversion in a standard risk aversion protocol (Holt and Laury, 2002). In our experiment, participants earn and retain money for a week before using it in an incentivized risk preference elicitation task. We find loss aversion, distinct from risk aversion, has a significant effect on behavior resulting in participants requiring higher compensation to bear risk.

  6. Risk-averse and Risk-seeking Investor Preferences for Oil Spot and Futures

    NARCIS (Netherlands)

    H.H. Lean (Hooi Hooi); M.J. McAleer (Michael); W.-K. Wong (Wing-Keung)

    2013-01-01

    textabstractThis paper examines risk-averse and risk-seeking investor preferences for oil spot and futures prices by using the mean-variance (MV) criterion and stochastic dominance (SD) approach. The MV findings cannot distinguish between the preferences of spot and futures markets. However, the SD

  7. Decisions during negatively-framed messages yield smaller risk-aversion-related brain activation in substance-dependent individuals.

    Science.gov (United States)

    Fukunaga, Rena; Bogg, Tim; Finn, Peter R; Brown, Joshua W

    2013-12-01

    A sizable segment of addiction research investigates the effects of persuasive message appeals on risky and deleterious behaviors. However, to date, little research has examined how various forms of message framing and corresponding behavioral choices might by mediated by risk-related brain regions. Using event-related functional MRI, we investigated brain regions hypothesized to mediate the influence of message appeals on decision making in substance-dependent (SD) compared with nonsubstance-dependent (non-SD) individuals. The Iowa Gambling Task (IGT) was modified to include positively-framed, negatively-framed, and control messages about long-term deck payoffs. In the positively-framed condition, the SD and non-SD groups showed improved decision-making performance that corresponded to higher risk-aversion-related brain activity in the anterior cingulate cortex (ACC) and anterior insula (AI). In contrast, in the negatively-framed condition, the SD group showed poorer performance that corresponded to lower risk-aversion-related brain activity in the AI region. In addition, only the non-SD group showed a positive association between decision quality and greater risk-related activity in the ACC, regardless of message type. The findings suggest substance-dependent individuals may have reduced neurocognitive sensitivity in the ACC and AI regions involved in risk perception and aversion during decision-making, especially in response to framed messages that emphasize reduced prospects for long-term gains. PsycINFO Database Record (c) 2013 APA, all rights reserved.

  8. Fairness concerns and risk aversion on recycle pricing strategies: Implications for environmentally friendly supply chains

    OpenAIRE

    He, Jianhong; Zhang, Lei; Lu, Binbin; Li, Lin

    2018-01-01

    This paper studies the pricing strategy in the closed-loop supply chain with Nash bargaining when considering fairness concerns and risk aversion. Mainly, the authors argue that behavioral factors (i.e., fairness concern and risk aversion) should be introduced into pricing process. They consider three different pricing models: the first is that both manufacturer and retailer have fairness concern; the second is both manufacturer and retailer have risk aversion and the final is manufacturer ha...

  9. Rationality on the rise: Why relative risk aversion increases with stake size

    OpenAIRE

    Fehr-Duda, Helga; Bruhin, Adrian; Epper, Thomas F.; Schubert, Renate

    2008-01-01

    How does risk tolerance vary with stake size? This important question cannot be adequately answered if framing effects, nonlinear probability weighting, and heterogeneity of preference types are neglected. We show that, contrary to gains, no coherent change in relative risk aversion is observed for losses. The increase in relative risk aversion over gains cannot be captured by the curvature of the utility function. It is driven predominantly by a change in probability weighting of a majority ...

  10. Public Sector Employees: Risk Averse and Altruistic?

    NARCIS (Netherlands)

    M.W.J.M. Buurman (Margaretha); A.J. Dur (Robert); S. Bossche, van den (Seth)

    2009-01-01

    textabstractWe assess whether public sector employees have a stronger inclination to serve others and are more risk averse than employees in the private sector. A unique feature of our study is that we use revealed rather than stated preferences data. Respondents of a large-scale survey were offered

  11. Public sector employees: risk averse and altruistic?

    NARCIS (Netherlands)

    Buurman, M.; Delfgaauw, J.; Dur, R.; Bossche, S.N.J. van den

    2012-01-01

    We assess whether public sector employees have a stronger inclination to serve others and are more risk averse than employees in the private sector. A unique feature of our study is that we use revealed rather than stated preferences data. Respondents of a large-scale survey were offered a

  12. Public sector employees: risk averse and altruistic?

    NARCIS (Netherlands)

    Buurman, M.; Dur, R.; Bossche, S.N.J. van den

    2009-01-01

    We assess whether public sector employees have a stronger inclination to serve others and are more risk averse than employees in the private sector. A unique feature of our study is that we use revealed rather than stated preferences data. Respondents of a large-scale survey were offered a

  13. Risk-averse formulations and methods for a virtual power plant

    KAUST Repository

    Lima, Ricardo M.; Conejo, Antonio J.; Langodan, Sabique; Hoteit, Ibrahim; Knio, Omar M.

    2017-01-01

    In this paper we address the optimal operation of a virtual power plant using stochastic programming. We consider one risk-neutral and two risk-averse formulations that rely on the conditional value at risk. To handle large-scale problems, we implement two decomposition methods with variants using single- and multiple-cuts. We propose the utilization of wind ensembles obtained from the European Centre for Medium Range Weather Forecasts (ECMWF) to quantify the uncertainty of the wind forecast. We present detailed results relative to the computational performance of the risk-averse formulations, the decomposition methods, and risk management and sensitivities analysis as a function of the number of scenarios and risk parameters. The implementation of the two decomposition methods relies on the parallel solution of subproblems, which turns out to be paramount for computational efficiency. The results show that one of the two decomposition methods is the most efficient.

  14. Risk-averse formulations and methods for a virtual power plant

    KAUST Repository

    Lima, Ricardo M.

    2017-12-15

    In this paper we address the optimal operation of a virtual power plant using stochastic programming. We consider one risk-neutral and two risk-averse formulations that rely on the conditional value at risk. To handle large-scale problems, we implement two decomposition methods with variants using single- and multiple-cuts. We propose the utilization of wind ensembles obtained from the European Centre for Medium Range Weather Forecasts (ECMWF) to quantify the uncertainty of the wind forecast. We present detailed results relative to the computational performance of the risk-averse formulations, the decomposition methods, and risk management and sensitivities analysis as a function of the number of scenarios and risk parameters. The implementation of the two decomposition methods relies on the parallel solution of subproblems, which turns out to be paramount for computational efficiency. The results show that one of the two decomposition methods is the most efficient.

  15. Optimal combined purchasing strategies for a risk-averse manufacturer under price uncertainty

    Directory of Open Access Journals (Sweden)

    Qiao Wu

    2015-09-01

    Full Text Available Purpose: The purpose of our paper is to analyze optimal purchasing strategies when a manufacturer can buy raw materials from a long-term contract supplier and a spot market under spot price uncertainty. Design/methodology/approach: This procurement model can be solved by using dynamic programming. First, we maximize the DM’s utility of the second period, obtaining the optimal contract quantity and spot quantity for the second period. Then, maximize the DM’s utility of both periods, obtaining the optimal purchasing strategy for the first period. We use a numerical method to compare the performance level of a pure spot sourcing strategy with that of a mixed strategy. Findings: Our results show that optimal purchasing strategies vary with the trend of contract prices. If the contract price falls, the total quantity purchased in period 1 will decrease in the degree of risk aversion. If the contract price increases, the total quantity purchased in period 1 will increase in the degree of risk aversion. The relationship between the optimal contract quantity and the degree of risk aversion depends on whether the expected spot price or the contract price is larger in period 2. Finally, we compare the performance levels between a combined strategy and a spot sourcing strategy. It shows that a combined strategy is optimal for a risk-averse buyer. Originality/value: It’s challenging to deal with a two-period procurement problem with risk consideration. We have obtained results of a two-period procurement problem with two sourcing options, namely contract procurement and spot purchases. Our model incorporates the buyer’s risk aversion factor and the change of contract prices, which are not addressed in early studies.

  16. PERFORMANCE EVALUATION AND RISK AVERSION RATE FOR SEVERAL STOCK INDICES IN INDONESIA STOCK EXCHANGE

    Directory of Open Access Journals (Sweden)

    Robiyanto Robiyanto

    2017-03-01

    Full Text Available There are numerous stock indices in Indonesia Stock Exchange. Several of them are LQ-45, MBX, DBX, JII, SRI-KEHATI, PEFINDO-25, BISNIS-27, IDX-30 and KOMPAS-100. Unfortunately there are limi­ted researches which have been done to measure those indices performance specifically. The same condition also occurs on risk aversion level usage in Indonesia Stock Exchange, only few numbers of researches use this me­a­surement in the portfolio valuation. Based on that, this research measured the performance and risk aversion rate of those indices in Indonesia Stock Exchange. The results of this study were SRI-KEHATI becomes the best performer with the highest risk aversion rate, while Jakarta Islamic Index (JII produces the lowest positive per­formance with the lowest risk aversion rate. This finding shows that sharia stocks’ characters (i.e. usury free could give relieveness and convenience regardless its per­formance.

  17. Subjective expected utility with non-increasing risk aversion

    NARCIS (Netherlands)

    Wakker, P.P.

    1989-01-01

    It is shown that assumptions about risk aversion, usually studied under the presupposition of expected utility maximization, have a surprising extra merit at an earlier stage of the measurement work: together with the sure-thing principle, these assumptions imply subjective expected utility

  18. Risk Aversion and Public Reporting. Part 1: Observations From Cardiac Surgery and Interventional Cardiology.

    Science.gov (United States)

    Shahian, David M; Jacobs, Jeffrey P; Badhwar, Vinay; D'Agostino, Richard S; Bavaria, Joseph E; Prager, Richard L

    2017-12-01

    Risk aversion is a potential unintended consequence of health care public reporting. In Part 1 of this review, four possible consequences of this phenomenon are discussed, including the denial of interventions to some high-risk patients, stifling of innovation, appropriate avoidance of futile interventions, and better matching of high-risk patients to more capable providers. We also summarize relevant observational clinical reports and survey results from cardiovascular medicine and surgery, the two specialties from which almost all risk aversion observations have been derived. Although these demonstrate that risk aversion does occur, the empirical data are much more consistent and compelling for interventional cardiology than for cardiac surgery. Copyright © 2017 The Society of Thoracic Surgeons. Published by Elsevier Inc. All rights reserved.

  19. Risk-Averse Suppliers’ Optimal Pricing Strategies in a Two-Stage Supply Chain

    Directory of Open Access Journals (Sweden)

    Rui Shen

    2013-01-01

    Full Text Available Risk-averse suppliers’ optimal pricing strategies in two-stage supply chains under competitive environment are discussed. The suppliers in this paper focus more on losses as compared to profits, and they care their long-term relationship with their customers. We introduce for the suppliers a loss function, which covers both current loss and future loss. The optimal wholesale price is solved under situations of risk neutral, risk averse, and a combination of minimizing loss and controlling risk, respectively. Besides, some properties of and relations among these optimal wholesale prices are given as well. A numerical example is given to illustrate the performance of the proposed method.

  20. Cooperative game analysis of a supply chain with one risk-neutral supplier and two risk-averse retailers

    Directory of Open Access Journals (Sweden)

    Changwen Li

    2014-09-01

    Full Text Available Purpose: This paper considers a two-echelon supply chain composed of one risk-neutral supplier and two risk-averse retailers. The retailers obtain production from the supplier and sell them to the market. Based on the cooperative game theory, the paper studies the appropriate profit allocation of the supply chain when all the players cooperate with each other, where the two retailers face a price-sensitive stochastic demand. The two retailers can either determine their retail prices independently, or decide whether or not to cooperate with each other. Design/methodology/approach: To allocate the system-wide profit among upstream risk-neutral suppliers and two risk-averse downstream retailers, this paper constructed a cooperative game model, considered as the supermodularity of the characteristic function and the Shapley value of the game. Findings and Originality/value: By analyzing the construction’s cooperative game model, the results show that the profit of the whole supply chain is the highest in the grand coalition structure. This paper also shows that the core of our cooperative game is nonempty, and has the supermodularity property. Based on this, we have computed the Shapley value-based profit allocation for the whole supply chain in a fair manner. Originality/value: Although there are a lot of literature examined risk aversion in a supply chain, but they did not consider using cooperative game to study this problem. This the first study is in the context of a supply chain with risk aversion problem.

  1. Female babies and risk-aversion: Causal evidence from hospital wards.

    Science.gov (United States)

    Pogrebna, Ganna; Oswald, Andrew J; Haig, David

    2018-03-01

    Using ultrasound scan data from paediatric hospitals, and the exogenous 'shock' of learning the gender of an unborn baby, the paper documents the first causal evidence that offspring gender affects adult risk-aversion. On a standard Holt-Laury criterion, parents of daughters, whether unborn or recently born, become almost twice as risk-averse as parents of sons. The study demonstrates this in longitudinal and cross-sectional data, for fathers and mothers, for babies in the womb and new-born children, and in a West European nation and East European nation. These findings may eventually aid our understanding of risky health behaviors and gender inequalities. Copyright © 2018 The Authors. Published by Elsevier B.V. All rights reserved.

  2. An Index of Loss Aversion

    NARCIS (Netherlands)

    Köbberling, V.; Wakker, P.P.

    2005-01-01

    To a considerable extent, risk aversion as it is commonly observed is caused by loss aversion. Several indexes of loss aversion have been proposed in the literature. The one proposed in this paper leads to a clear decomposition of risk attitude into three distinct components: basic utility,

  3. An Index of Loss Aversion

    NARCIS (Netherlands)

    V. Köbberling (Veronika); P.P. Wakker (Peter)

    2005-01-01

    textabstractTo a considerable extent, risk aversion as it is commonly observed is caused by loss aversion. Several indexes of loss aversion have been proposed in the literature. The one proposed in this paper leads to a clear decomposition of risk attitude into three distinct components: basic

  4. Identification of risk aversion factor for radiation workers in Korea

    International Nuclear Information System (INIS)

    Fadul, Abdulbagi; Na, Seong H.

    2016-01-01

    Radiation aversion factor reflects the degree of avoidance of radiation exposure which is considered a fundamental element in the optimization of radiation protection and a key factor in determining the real monetary value of the man-Sievert (Sv). This study provides an adjusted risk aversion factor, which was prescribed by the Korea Institute for Nuclear Safety (KINS), a regulatory body in Korea. Specifically, the Korea Hydro and Nuclear Power Co., Ltd. (KHNP) evaluated the monetary value of the man-Sv for Korean Nuclear Power Plants (NPPs) workers. This monetary value was assessed by the radiation aversion factor. Consequently, identifying the monetary value of the man-Sv in this study will enhance not only the effectiveness of optimization of radiation protection in Korea but also contribute to reduce doses to As Low As Reasonably Achievable (ALARA) when accounting for economic and societal aspects. The primary purpose of this study is to obtain the risk aversion factor for radiation workers in medical and industrial facilities in Korea. The secondary purpose is to evaluate the real monetary value of the man-Sv.These objectives will be accomplished by collecting data from surveys that consider a variety of socio-economic conditions. The value of 1.45 represents considerable avoidance of radiation risk for the majority of NDT radiographers due to familiarity and work experience with radiation hazards. On the other hand, the value 1.57 indicates that most of radiation medical practitioners, in particular, interventional radiologists have a strong will to avoid radiation risk. However, they will accept more risk with incremental salary increases. For international comparison, the concept of Purchasing Power Parity (PPP) should be adopted to obtain the alpha values in real term. Certainly, this monetary value of the man-Sv is expected to contribute effectively in optimization of radiation protection in both medical and industrial fields. The findings of this study

  5. Identification of risk aversion factor for radiation workers in Korea

    Energy Technology Data Exchange (ETDEWEB)

    Fadul, Abdulbagi [KAIST, Daejeon (Korea, Republic of); Na, Seong H. [Korea Institute of Nuclear Safety, Daejeon (Korea, Republic of)

    2016-10-15

    Radiation aversion factor reflects the degree of avoidance of radiation exposure which is considered a fundamental element in the optimization of radiation protection and a key factor in determining the real monetary value of the man-Sievert (Sv). This study provides an adjusted risk aversion factor, which was prescribed by the Korea Institute for Nuclear Safety (KINS), a regulatory body in Korea. Specifically, the Korea Hydro and Nuclear Power Co., Ltd. (KHNP) evaluated the monetary value of the man-Sv for Korean Nuclear Power Plants (NPPs) workers. This monetary value was assessed by the radiation aversion factor. Consequently, identifying the monetary value of the man-Sv in this study will enhance not only the effectiveness of optimization of radiation protection in Korea but also contribute to reduce doses to As Low As Reasonably Achievable (ALARA) when accounting for economic and societal aspects. The primary purpose of this study is to obtain the risk aversion factor for radiation workers in medical and industrial facilities in Korea. The secondary purpose is to evaluate the real monetary value of the man-Sv.These objectives will be accomplished by collecting data from surveys that consider a variety of socio-economic conditions. The value of 1.45 represents considerable avoidance of radiation risk for the majority of NDT radiographers due to familiarity and work experience with radiation hazards. On the other hand, the value 1.57 indicates that most of radiation medical practitioners, in particular, interventional radiologists have a strong will to avoid radiation risk. However, they will accept more risk with incremental salary increases. For international comparison, the concept of Purchasing Power Parity (PPP) should be adopted to obtain the alpha values in real term. Certainly, this monetary value of the man-Sv is expected to contribute effectively in optimization of radiation protection in both medical and industrial fields. The findings of this study

  6. Shared risk aversion in spontaneous and induced abortion.

    Science.gov (United States)

    Catalano, Ralph; Bruckner, Tim A; Karasek, Deborah; Adler, Nancy E; Mortensen, Laust H

    2016-05-01

    Does the incidence of spontaneous abortion correlate positively over conception cohorts with the incidence of non-clinically indicated induced abortion as predicted by shared risk aversion? We find that the number of spontaneous and non-clinically indicated induced abortions correlates in conception cohorts, suggesting that risk aversion affects both the conscious and non-conscious mechanisms that control parturition. Much literature speculates that natural selection conserved risk aversion because the trait enhanced Darwinian fitness. Risk aversion, moreover, supposedly influences all decisions including those that individuals can and cannot report making. We argue that these circumstances, if real, would manifest in conscious and non-conscious decisions to invest in prospective offspring, and therefore affect incidence of induced and spontaneous abortion over time. Using data from Denmark, we test the hypothesis that monthly conception cohorts yielding unexpectedly many non-clinically indicated induced abortions also yield unexpectedly many spontaneous abortions. The 180 month test period (January 1995 through December 2009), yielded 1 351 800 gestations including 156 780 spontaneous as well as 233 280 induced abortions 9100 of which were clinically indicated. We use Box-Jenkins transfer functions to adjust the incidence of spontaneous and non-clinically indicated induced abortions for autocorrelation (including seasonality), cohort size, and fetal as well as gestational anomalies over the 180-month test period. We use cross-correlation to test our hypothesized association. We find a positive association between spontaneous and non-clinically indicated induced abortions. This suggests, consistent with our theory, that mothers of conception cohorts that yielded more spontaneous abortions than expected opted more frequently than expected for non-clinically indicated induced abortion. Limitations of our work include that even the world's best registration system

  7. Unpleasant odors increase aversion to monetary losses.

    Science.gov (United States)

    Stancak, Andrej; Xie, Yuxin; Fallon, Nicholas; Bulsing, Patricia; Giesbrecht, Timo; Thomas, Anna; Pantelous, Athanasios A

    2015-04-01

    Loss aversion is the tendency to prefer avoiding losses over acquiring gains of equal nominal values. Unpleasant odors not only influence affective state but have also been shown to activate brain regions similar to those mediating loss aversion. Therefore, we hypothesized a stronger loss aversion in a monetary gamble task if gambles were associated with an unpleasant as opposed to pleasant odor. In thirty human subjects, unpleasant (methylmercaptan), pleasant (jasmine), and neutral (clean air) odors were presented for 4 s. At the same time, uncertain gambles offering an equal chance of gain or loss of a variable amount of money, or a prospect of an assured win were displayed. One hundred different gambles were presented three times, each time paired with a different odor. Loss aversion, risk aversion, and logit sensitivity were evaluated using non-linear fitting of individual gamble decisions. Loss aversion was larger when prospects were displayed in the presence of methylmercaptan compared to jasmine or clean air. Moreover, individual differences in changes in loss aversion to the unpleasant as compared to pleasant odor correlated with odor pleasantness but not with odor intensity. Skin conductance responses to losses during the outcome period were larger when gambles were associated with methylmercaptan compared to jasmine. Increased loss aversion while perceiving an unpleasant odor suggests a dynamic adjustment of loss aversion toward greater sensitivity to losses. Given that odors are biological signals of hazards, such adjustment of loss aversion may have adaptive value in situations entailing threat or danger. Copyright © 2015 Elsevier B.V. All rights reserved.

  8. On the descriptive value of loss aversion in decisions under risk: Six clarifications

    OpenAIRE

    Eyal Ert; Ido Erev

    2013-01-01

    Previous studies of loss aversion in decisions under risk have led to mixed results. Losses appear to loom larger than gains in some settings, but not in others. The current paper clarifies these results by highlighting six experimental manipulations that tend to increase the likelihood of the behavior predicted by loss aversion. These manipulations include: (1) framing of the safe alternative as the status quo; (2) ensuring that the choice pattern predicted by loss aversion maximizes the pro...

  9. Small- and large-stakes risk aversion: implications of concavity calabration for decision theory

    NARCIS (Netherlands)

    Cox, J.C.; Sadiraj, V.

    2006-01-01

    A growing literature reports the conclusions that: (a) expected utility theory does not provide a plausible theory of risk aversion for both small-stakes and large-stakes gambles; and (b) this decision theory should be replaced with an alternative theory characterized by loss aversion. This paper

  10. Risk aversion and willingness to pay for energy efficient systems in rental apartments

    Energy Technology Data Exchange (ETDEWEB)

    Farsi, Mehdi [Centre for Energy Policy and Economics, ETH Zurich, Zuerichbergstr. 18, Zurich 8032 (Switzerland)

    2010-06-15

    This paper uses a random utility model to estimate consumers' valuation of energy efficient insulation and ventilation systems in rental apartments. Given consumers' limited experience in residential buildings and the perceived uncertainty about their comfort benefits and resulting energy savings, these relatively new technologies might be undervalued by risk-averse consumers. Using the concept of certainty-equivalence, this paper proposes a model to assess the consumers' risk-aversion for adopting energy-efficient systems. These systems are treated as risky assets while conventional commodities are assumed to be risk-free. The curvature of the utility function is interpreted as a measure of aversion to perceived risks as opposed to explicit risks measured by observed variances. The proposed formulation is applicable in stated preference data with qualitative variables. The model is applied to data from a choice experiment conducted among 264 apartment tenants in Switzerland. The estimated curvatures reject the risk-neutrality hypothesis. The range of the estimated risk premiums suggests that risk considerations remain a central issue in dealing with energy efficiency in residential buildings. The analysis also indicates that assuming same risk attitudes toward new and conventional systems could bias the estimates of the willingness to pay, especially when the system is comprised of several components. (author)

  11. Risk aversion and willingness to pay for energy efficient systems in rental apartments

    International Nuclear Information System (INIS)

    Farsi, Mehdi

    2010-01-01

    This paper uses a random utility model to estimate consumers' valuation of energy efficient insulation and ventilation systems in rental apartments. Given consumers' limited experience in residential buildings and the perceived uncertainty about their comfort benefits and resulting energy savings, these relatively new technologies might be undervalued by risk-averse consumers. Using the concept of certainty-equivalence, this paper proposes a model to assess the consumers' risk-aversion for adopting energy-efficient systems. These systems are treated as risky assets while conventional commodities are assumed to be risk-free. The curvature of the utility function is interpreted as a measure of aversion to perceived risks as opposed to explicit risks measured by observed variances. The proposed formulation is applicable in stated preference data with qualitative variables. The model is applied to data from a choice experiment conducted among 264 apartment tenants in Switzerland. The estimated curvatures reject the risk-neutrality hypothesis. The range of the estimated risk premiums suggests that risk considerations remain a central issue in dealing with energy efficiency in residential buildings. The analysis also indicates that assuming same risk attitudes toward new and conventional systems could bias the estimates of the willingness to pay, especially when the system is comprised of several components.

  12. Absolute Risk Aversion and the Returns to Education.

    Science.gov (United States)

    Brunello, Giorgio

    2002-01-01

    Uses 1995 Italian household income and wealth survey to measure individual absolute risk aversion of 1,583 married Italian male household heads. Uses this measure as an instrument for attained education in a standard-log earnings equation. Finds that the IV estimate of the marginal return to schooling is much higher than the ordinary least squares…

  13. Electricity capacity investment under risk aversion: A case study of coal, gas, and concentrated solar power

    International Nuclear Information System (INIS)

    Fan Lin; Norman, Catherine S.; Patt, Anthony G.

    2012-01-01

    The policy instrument many economists favor to reduce greenhouse gas emissions and to shift new investment towards low carbon technologies is the tradable allowance system. Experience with this instrument has been mixed, with a crucial design issue being the choice of whether to auction allowances to firms, or to grandfather them based on historical emissions. In this paper, we examine the changing incentives of investment in different technologies, when investors are risk averse and are expecting an allowance system with a certain allocation rule but do not know if the policy is going to take place in the near future. Investors also cannot fully predict future investment costs for the low-carbon technology. We apply a game theoretic model to examine the combined effects of uncertainty and risk aversion on the actions of potential investors into high and low carbon generating capacity, under both allocation rules and uncertain costs. We find that uncertainty and risk aversion do have implications towards investment incentives. We discuss policy implications of these findings. - Highlights: ► We examined capacity investments under alternative carbon permit allocation schemes. ► Uncertainty in future permit markets’ existence reduces investments into renewables. ► If permits are grandfathered, risk averse companies decrease renewable investment. ► Risk aversion minimizes the effects of uncertainty if carbon permits are auctioned.

  14. Money, well-being, and loss aversion: does an income loss have a greater effect on well-being than an equivalent income gain?

    Science.gov (United States)

    Boyce, Christopher J; Wood, Alex M; Banks, James; Clark, Andrew E; Brown, Gordon D A

    2013-12-01

    Higher income is associated with greater well-being, but do income gains and losses affect well-being differently? Loss aversion, whereby losses loom larger than gains, is typically examined in relation to decisions about anticipated outcomes. Here, using subjective-well-being data from Germany (N = 28,723) and the United Kingdom (N = 20,570), we found that losses in income have a larger effect on well-being than equivalent income gains and that this effect is not explained by diminishing marginal benefits of income to well-being. Our findings show that loss aversion applies to experienced losses, challenging suggestions that loss aversion is only an affective-forecasting error. By failing to account for loss aversion, longitudinal studies of the relationship between income and well-being may have overestimated the positive effect of income on well-being. Moreover, societal well-being might best be served by small and stable income increases, even if such stability impairs long-term income growth.

  15. Enhanced striatal sensitivity to aversive reinforcement in adolescents versus adults.

    Science.gov (United States)

    Galván, Adriana; McGlennen, Kristine M

    2013-02-01

    Neurodevelopmental changes in mesolimbic regions are associated with adolescent risk-taking behavior. Numerous studies have shown exaggerated activation in the striatum in adolescents compared with children and adults during reward processing. However, striatal sensitivity to aversion remains elusive. Given the important role of the striatum in tracking both appetitive and aversive events, addressing this question is critical to understanding adolescent decision-making, as both positive and negative factors contribute to this behavior. In this study, human adult and adolescent participants performed a task in which they received squirts of appetitive or aversive liquid while undergoing fMRI, a novel approach in human adolescents. Compared with adults, adolescents showed greater behavioral and striatal sensitivity to both appetitive and aversive stimuli, an effect that was exaggerated in response to delivery of the aversive stimulus. Collectively, these findings contribute to understanding how neural responses to positive and negative outcomes differ between adolescents and adults and how they may influence adolescent behavior.

  16. Alcohol reduces aversion to ambiguity

    Directory of Open Access Journals (Sweden)

    Tadeusz eTyszka

    2015-01-01

    Full Text Available Several years ago, Cohen, Dearnaley, and Hansel [1] demonstrated that under the influence of alcohol drivers became more risk prone, although their risk perception remained unchanged. Research shows that ambiguity aversion is to some extent positively correlated with risk aversion, though not very highly [2]. The question addressed by the present research is whether alcohol reduces ambiguity aversion. Our research was conducted in a natural setting (a restaurant bar, where customers with differing levels of alcohol intoxication were offered a choice between a risky and an ambiguous lottery. We found that alcohol reduced ambiguity aversion and that the effect occurred in men but not women. We interpret these findings in terms of the risk-as-value hypothesis, according to which, people in Western culture tend to value risk, and suggest that alcohol consumption triggers adherence to socially and culturally valued patterns of conduct different for men and women.

  17. Alcohol reduces aversion to ambiguity.

    Science.gov (United States)

    Tyszka, Tadeusz; Macko, Anna; Stańczak, Maciej

    2014-01-01

    Several years ago, Cohen et al. (1958) demonstrated that under the influence of alcohol drivers became more risk prone, although their risk perception remained unchanged. Research shows that ambiguity aversion is to some extent positively correlated with risk aversion, though not very highly (Camerer and Weber, 1992). The question addressed by the present research is whether alcohol reduces ambiguity aversion. Our research was conducted in a natural setting (a restaurant bar), where customers with differing levels of alcohol intoxication were offered a choice between a risky and an ambiguous lottery. We found that alcohol reduced ambiguity aversion and that the effect occurred in men but not women. We interpret these findings in terms of the risk-as-value hypothesis, according to which, people in Western culture tend to value risk, and suggest that alcohol consumption triggers adherence to socially and culturally valued patterns of conduct different for men and women.

  18. Financial literacy, risk aversion and choice of mortgage type by households

    NARCIS (Netherlands)

    Cox, R.; Brounen, Dirk; Neuteboom, P.

    2015-01-01

    This paper analyzes how financial literacy and reported willingness to take financial risk impact a household’s choice of mortgage type. The results show that households reporting higher financial literacy and lower risk aversion are 55 to 97 % more likely to opt for interest-only mortgages. The

  19. Stackelberg game of buyback policy in supply chain with a risk-averse retailer and a risk-averse supplier based on CVaR.

    Directory of Open Access Journals (Sweden)

    Yanju Zhou

    Full Text Available This paper considers a decentralized supply chain in which a single supplier sells a perishable product to a single retailer facing uncertain demand. We assume that the supplier and the retailer are both risk averse and utilize Conditional Value at Risk (CVaR, a risk measure method which is popularized in financial risk management, to estimate their risk attitude. We establish a buyback policy model based on Stackelberg game theory under considering supply chain members' risk preference and get the expressions of the supplier's optimal repurchase price and the retailer's optimal order quantity which are compared with those under risk neutral case. Finally, a numerical example is applied to simulate that model and prove related conclusions.

  20. Stackelberg game of buyback policy in supply chain with a risk-averse retailer and a risk-averse supplier based on CVaR.

    Science.gov (United States)

    Zhou, Yanju; Chen, Qian; Chen, Xiaohong; Wang, Zongrun

    2014-01-01

    This paper considers a decentralized supply chain in which a single supplier sells a perishable product to a single retailer facing uncertain demand. We assume that the supplier and the retailer are both risk averse and utilize Conditional Value at Risk (CVaR), a risk measure method which is popularized in financial risk management, to estimate their risk attitude. We establish a buyback policy model based on Stackelberg game theory under considering supply chain members' risk preference and get the expressions of the supplier's optimal repurchase price and the retailer's optimal order quantity which are compared with those under risk neutral case. Finally, a numerical example is applied to simulate that model and prove related conclusions.

  1. Modeling OPEC behavior: theories of risk aversion for oil producer decisions

    International Nuclear Information System (INIS)

    Reynolds, D.B.

    1999-01-01

    Theories of OPEC such as price leadership, cartel, or game theoretic models suggest an incentive for OPEC members to expand their production capacity well above current levels in order to maximize revenues. Yet individual OPEC members consistently explore for and develop oil fields at a level well below their potential. The cause of low oil exploration and development efforts among OPEC members, and even some non-OPEC members, may have to do with risk aversion. This paper describes an alternative theory for OPEC behavior based on risk aversion using a two piece non-Neumann-Morgenstern utility function similar to Fishburn and Koehenberger (1979, Decision Science 10, 503-518), and Friedman and Savage (1948, Journal of political Economy 56). The model shows possible low oil production behavior. (author)

  2. Cognitive decline is associated with risk aversion and temporal discounting in older adults without dementia.

    Directory of Open Access Journals (Sweden)

    Bryan D James

    Full Text Available Risk aversion and temporal discounting are preferences that are strongly linked to sub-optimal financial and health decision making ability. Prior studies have shown they differ by age and cognitive ability, but it remains unclear whether differences are due to age-related cognitive decline or lower cognitive abilities over the life span. We tested the hypothesis that cognitive decline is associated with higher risk aversion and temporal discounting in 455 older persons without dementia from the Memory and Aging Project, a longitudinal cohort study of aging in Chicago. All underwent repeated annual cognitive evaluations using a detailed battery including 19 tests. Risk aversion was measured using standard behavioral economics questions: participants were asked to choose between a certain monetary payment versus a gamble in which they could gain more or nothing; potential gamble gains varied across questions. Temporal discounting: participants were asked to choose between an immediate, smaller payment and a delayed, larger one; two sets of questions addressed small and large stakes based on payment amount. Regression analyses were used to examine whether prior rate of cognitive decline predicted level of risk aversion and temporal discounting, controlling for age, sex, and education. Over an average of 5.5 (SD=2.9 years, cognition declined at an average of 0.016 units per year (SD=0.03. More rapid cognitive decline predicted higher levels of risk aversion (p=0.002 and temporal discounting (small stakes: p=0.01, high stakes: p=0.006. Further, associations between cognitive decline and risk aversion (p=0.015 and large stakes temporal discounting (p=0.026 persisted in analyses restricted to persons without any cognitive impairment (i.e., no dementia or mild cognitive impairment; the association of cognitive decline and small stakes temporal discounting was no longer statistically significant (p=0.078. These findings are consistent with the

  3. Cognitive decline is associated with risk aversion and temporal discounting in older adults without dementia.

    Science.gov (United States)

    James, Bryan D; Boyle, Patricia A; Yu, Lei; Han, S Duke; Bennett, David A

    2015-01-01

    Risk aversion and temporal discounting are preferences that are strongly linked to sub-optimal financial and health decision making ability. Prior studies have shown they differ by age and cognitive ability, but it remains unclear whether differences are due to age-related cognitive decline or lower cognitive abilities over the life span. We tested the hypothesis that cognitive decline is associated with higher risk aversion and temporal discounting in 455 older persons without dementia from the Memory and Aging Project, a longitudinal cohort study of aging in Chicago. All underwent repeated annual cognitive evaluations using a detailed battery including 19 tests. Risk aversion was measured using standard behavioral economics questions: participants were asked to choose between a certain monetary payment versus a gamble in which they could gain more or nothing; potential gamble gains varied across questions. Temporal discounting: participants were asked to choose between an immediate, smaller payment and a delayed, larger one; two sets of questions addressed small and large stakes based on payment amount. Regression analyses were used to examine whether prior rate of cognitive decline predicted level of risk aversion and temporal discounting, controlling for age, sex, and education. Over an average of 5.5 (SD=2.9) years, cognition declined at an average of 0.016 units per year (SD=0.03). More rapid cognitive decline predicted higher levels of risk aversion (p=0.002) and temporal discounting (small stakes: p=0.01, high stakes: p=0.006). Further, associations between cognitive decline and risk aversion (p=0.015) and large stakes temporal discounting (p=0.026) persisted in analyses restricted to persons without any cognitive impairment (i.e., no dementia or mild cognitive impairment); the association of cognitive decline and small stakes temporal discounting was no longer statistically significant (p=0.078). These findings are consistent with the hypothesis that

  4. Negative learning bias is associated with risk aversion in a genetic animal model of depression.

    Science.gov (United States)

    Shabel, Steven J; Murphy, Ryan T; Malinow, Roberto

    2014-01-01

    The lateral habenula (LHb) is activated by aversive stimuli and the omission of reward, inhibited by rewarding stimuli and is hyperactive in helpless rats-an animal model of depression. Here we test the hypothesis that congenital learned helpless (cLH) rats are more sensitive to decreases in reward size and/or less sensitive to increases in reward than wild-type (WT) control rats. Consistent with the hypothesis, we found that cLH rats were slower to switch preference between two responses after a small upshift in reward size on one of the responses but faster to switch their preference after a small downshift in reward size. cLH rats were also more risk-averse than WT rats-they chose a response delivering a constant amount of reward ("safe" response) more often than a response delivering a variable amount of reward ("risky" response) compared to WT rats. Interestingly, the level of bias toward negative events was associated with the rat's level of risk aversion when compared across individual rats. cLH rats also showed impaired appetitive Pavlovian conditioning but more accurate responding in a two-choice sensory discrimination task. These results are consistent with a negative learning bias and risk aversion in cLH rats, suggesting abnormal processing of rewarding and aversive events in the LHb of cLH rats.

  5. Conformists or Rebels? Relative Risk Aversion, Educational Decisions, and Social Class Reproduction

    DEFF Research Database (Denmark)

    Holm, Anders; Jæger, Mads Meier

    2012-01-01

    This paper tests the theory of Relative Risk Aversion (RRA), which argues that educational decisions are intended to minimize the risk of downward social class mobility. We propose a structural model which distinguishes the instantaneous utility of educational decisions from the future utility...

  6. Decisions for Others Are Less Risk-Averse in the Gain Frame and Less Risk-Seeking in the Loss Frame Than Decisions for the Self.

    Science.gov (United States)

    Zhang, Xiangyi; Liu, Yi; Chen, Xiyou; Shang, Xuesong; Liu, Yongfang

    2017-01-01

    Despite the fact that people make decisions for others as often as they make decisions for themselves, little is known about how decisions for others are different from those made for the self. In two experiments, we investigated the effect of social distance (i.e., making decisions for oneself, a friend, or a stranger) on risk preferences in both gain and loss situations. We found that people were more risk averse in gain situations when they made decisions for themselves than for a stranger (Studies 1 and 2), but were equally risk averse for themselves and their friends (Study 2). However, people were more risk seeking in loss situations when they made decisions for themselves than for their friends as well as for a stranger, and were more risk seeking for their friends than for a stranger (Study 2). Furthermore, the effect of social distance on risk preferences was stronger in loss than in gain situations. Mediation analysis indicated that outcome-induced loss aversion was responsible for effects of social distance on risk preferences. These findings demonstrate that social distance influences risk preferences via perceived loss aversion, which sheds new light on self-other differences in decision making.

  7. Decision Making in the Balloon Analogue Risk Task (BART): Anterior Cingulate Cortex Signals Loss-Aversion but not the Infrequency of Risky Choices

    Science.gov (United States)

    Fukunaga, Rena; Brown, Joshua W.; Bogg, Tim

    2012-01-01

    The inferior frontal gyrus/anterior insula (IFG/AI) and anterior cingulate cortex (ACC) are key regions involved in risk appraisal during decision making, but accounts of how these regions contribute to decision-making under risk remain contested. To help clarify the roles of these and other related regions, we used a modified version of the Balloon Analogue Risk Task (Lejuez et al., 2002) to distinguish between decision-making and feedback-related processes when participants decided to pursue a gain as the probability of loss increased parametrically. Specifically, we set out to test whether ACC and IFG/AI regions correspond to loss-aversion at the time of decision making in a way that is not confounded with either reward-seeking or infrequency effects. When participants chose to discontinue inflating the balloon (win option), we observed greater ACC and mainly bilateral IFG/AI activity at the time of decision as the probability of explosion increased, consistent with increased loss-aversion but inconsistent with an infrequency effect. In contrast, we found robust vmPFC activity when participants chose to continue inflating the balloon (risky option), consistent with reward-seeking. However, in the cingulate and mainly bilateral IFG regions, BOLD activation decreased when participants chose to inflate the balloon as the probability of explosion increased, findings consistent with a reduced loss-aversion signal. Our results highlight the existence of distinct reward-seeking and loss-averse signals during decision-making, as well as the importance of distinguishing decision and feedback signals. PMID:22707378

  8. Decision making in the Balloon Analogue Risk Task (BART): anterior cingulate cortex signals loss aversion but not the infrequency of risky choices.

    Science.gov (United States)

    Fukunaga, Rena; Brown, Joshua W; Bogg, Tim

    2012-09-01

    The inferior frontal gyrus/anterior insula (IFG/AI) and anterior cingulate cortex (ACC) are key regions involved in risk appraisal during decision making, but accounts of how these regions contribute to decision making under risk remain contested. To help clarify the roles of these and other related regions, we used a modified version of the Balloon Analogue Risk Task (Lejuez et al., Journal of Experimental Psychology: Applied, 8, 75-84, 2002) to distinguish between decision-making and feedback-related processes when participants decided to pursue a gain as the probability of loss increased parametrically. Specifically, we set out to test whether the ACC and IFG/AI regions correspond to loss aversion at the time of decision making in a way that is not confounded with either reward-seeking or infrequency effects. When participants chose to discontinue inflating the balloon (win option), we observed greater ACC and mainly bilateral IFG/AI activity at the time of decision as the probability of explosion increased, consistent with increased loss aversion but inconsistent with an infrequency effect. In contrast, we found robust vmPFC activity when participants chose to continue inflating the balloon (risky option), consistent with reward seeking. However, in the cingulate and in mainly bilateral IFG regions, blood-oxygenation-level-dependent activation decreased when participants chose to inflate the balloon as the probability of explosion increased, findings that are consistent with a reduced loss aversion signal. Our results highlight the existence of distinct reward-seeking and loss-averse signals during decision making, as well as the importance of distinguishing between decision and feedback signals.

  9. Decisions for Others Are Less Risk-Averse in the Gain Frame and Less Risk-Seeking in the Loss Frame Than Decisions for the Self

    Science.gov (United States)

    Zhang, Xiangyi; Liu, Yi; Chen, Xiyou; Shang, Xuesong; Liu, Yongfang

    2017-01-01

    Despite the fact that people make decisions for others as often as they make decisions for themselves, little is known about how decisions for others are different from those made for the self. In two experiments, we investigated the effect of social distance (i.e., making decisions for oneself, a friend, or a stranger) on risk preferences in both gain and loss situations. We found that people were more risk averse in gain situations when they made decisions for themselves than for a stranger (Studies 1 and 2), but were equally risk averse for themselves and their friends (Study 2). However, people were more risk seeking in loss situations when they made decisions for themselves than for their friends as well as for a stranger, and were more risk seeking for their friends than for a stranger (Study 2). Furthermore, the effect of social distance on risk preferences was stronger in loss than in gain situations. Mediation analysis indicated that outcome-induced loss aversion was responsible for effects of social distance on risk preferences. These findings demonstrate that social distance influences risk preferences via perceived loss aversion, which sheds new light on self-other differences in decision making. PMID:28966604

  10. Mean-Preserving-Spread Risk Aversion and The CAPM

    OpenAIRE

    Phelim P. Boyle; Chenghu Ma

    2013-01-01

    This paper establishes conditions under which the classical CAPM holds in equilibrium. Our derivation uses simple arguments to clarify and extend results available in the literature. We show that if agents are risk averse in the sense of mean-preserving-spread (MPS) the CAPM will necessarily hold, along with two-fund separation. We derive this result without imposing any distributional assumptions on asset returns. The CAPM holds even when the market contains an infinite number of securities ...

  11. Risk aversion and religious behaviour: Analysis using a sample of Danish twins.

    Science.gov (United States)

    Nielsen, Jytte Seested; Bech, Mickael; Christensen, Kaare; Kiil, Astrid; Hvidt, Niels Christian

    2017-08-01

    Economics offers an analytical framework to consider human behaviour including religious behaviour. Within the realm of Expected Utility Theory, religious belief and activity could be interpreted as an insurance both for current life events and for afterlife rewards. Based on that framework, we would expect that risk averse individuals would demand a more generous protection plan which they may do by devoting more effort and resources into religious activities such as church attendance and prayer, which seems to be in accordance with previous empirical results. However, a general concern regards the problems of spurious correlations due to underlying omitted or unobservable characteristics shaping both religious activities and risk attitudes. This paper examines empirically the demand for religion by analysing the association between risk attitudes on the one hand, and church attandance and prayer frequency on the other controlling for unobservable variables using survey data of Danish same-sex twin pairs. We verify the correlation between risk preferences and religion found previously by carrying out cross-sectional analyses. We also show that the association between risk attitudes and religious behaviour is driven by the subgroup of individuals who believe in an afterlife. In addition, when re-analysing our results using panel data analyses which cancel out shared factors among twin pairs, we find that the correlation found between risk aversion and religious behaviour is no longer significant indicating that other factors might explain differences in religious behaviour. Caution is needed in the interpretation of our results as the insignificant association between risk aversion and religious behaviour in the panel data analyses potentially might be due to measurement error causing attenuation bias or lack of variation within twin pairs rather than the actual absence of an association. Copyright © 2017 Elsevier B.V. All rights reserved.

  12. Application of a General Risk Management Model to Portfolio Optimization Problems with Elliptical Distributed Returns for Risk Neutral and Risk Averse Decision Makers

    NARCIS (Netherlands)

    B. Kaynar; S.I. Birbil (Ilker); J.B.G. Frenk (Hans)

    2007-01-01

    textabstractIn this paper portfolio problems with linear loss functions and multivariate elliptical distributed returns are studied. We consider two risk measures, Value-at-Risk and Conditional-Value-at-Risk, and two types of decision makers, risk neutral and risk averse. For Value-at-Risk, we show

  13. Quantifying uncertainty in pest risk maps and assessments: adopting a risk-averse decision maker’s perspective

    Science.gov (United States)

    Denys Yemshanov; Frank H. Koch; Mark J. Ducey; Robert A. Haack; Marty Siltanen; Kirsty Wilson

    2013-01-01

    Pest risk maps are important decision support tools when devising strategies to minimize introductions of invasive organisms and mitigate their impacts. When possible management responses to an invader include costly or socially sensitive activities, decision-makers tend to follow a more certain (i.e., risk-averse) course of action. We presented a new mapping technique...

  14. Integrated framework for the external cost assessment of nuclear power plant accident considering risk aversion: The Korean case

    International Nuclear Information System (INIS)

    Lee, Sang Hun; Kang, Hyun Gook

    2016-01-01

    Recently, the estimation of accident costs within the social costs of nuclear power plants (NPPs) has garnered substantial interest. In particular, the risk aversion behavior of the public toward an NPP accident is considered an important factor when integrating risk aversion into NPP accident cost. In this study, an integrated framework for the external cost assessment of NPP accident that measures the value of statistical life (VSL) and the relative risk aversion (RRA) coefficient for NPP accident based on an individual-level survey is proposed. To derive the willingness to pay and the RRA coefficient for NPP accident risks, a survey was conducted on a sample of 1550 individuals in Korea. The estimation obtained a mean VSL of USD 2.78 million and an RRA coefficient of 1.315. Based on the estimation results in which various cost factors were considered, a multiplication factor of 5.16 and an external cost of NPP accidents of 4.39E−03 USD-cents/kW h were estimated. This study is expected to provide insight to energy policy decision-makers on analyzing the economic validity of NPP compared to other energy sources by reflecting the estimated external cost of NPP accident into the unit electricity generation cost of NPP. - Highlights: •External cost assessment framework for NPP is proposed considering risk aversion. •VSL was derived from WTP for mortality risk reduction from hypothetical NPP accident. •RRA was derived to integrate public risk aversion into external cost of NPP accident. •Individual-level survey was conducted to derive WTP and RRA for NPP accident risk. •The external cost was estimated considering the direct cost factors of NPP accident.

  15. Impact of Risk Aversion on the Operation of Hydroelectric Reservoirs in the Presence of Renewable Energy Sources

    Directory of Open Access Journals (Sweden)

    Nenad Jovanović

    2018-05-01

    Full Text Available The increasing share of renewable energy sources, such as wind and solar generation, has a direct impact on the planning and operation of power systems. In addition, the consideration of risk criteria within the decision support tools used by market participants (generation companies, energy services companies, and arbitrageurs is becoming a common activity given the increasing level of uncertainties faced by them. As a consequence, the behavior of market participants is affected by their level of risk aversion, and the application of equilibrium-based models is a common technique used in order to simulate their behavior. This paper presents a multi-stage market equilibrium model of risk-averse agents in order to analyze up to what extent the operation of hydro reservoirs can be affected by the risk-averse profile of market participants in a context of renewable energy source penetration and fuel price volatility.

  16. Impact of gender and personality traits (BFI-10) on risk-aversion

    DEFF Research Database (Denmark)

    Pavlicek, Antonin; Sudzina, Frantisek

    2017-01-01

    The paper investigates impact of gender and personality traits on risk-aversion. The research was conducted in the Czech Republic using an on-line questionnaire. Data were collected between December 2016 and January 2017. Big Five Inventory-10 was used to measure personality traits. A validated...

  17. Environmental and Economic Optimization Model for Electric System Planning in Ningxia, China: Inexact Stochastic Risk-Aversion Programming Approach

    Directory of Open Access Journals (Sweden)

    L. Ji

    2015-01-01

    Full Text Available The main goal of this paper is to provide a novel risk aversion model for long-term electric power system planning from the manager’s perspective with the consideration of various uncertainties. In the proposed method, interval parameter programming and two-stage stochastic programming are integrated to deal with the technical, economics, and policy uncertainties. Moreover, downside risk theory is introduced to balance the trade-off between the profit and risk according to the decision-maker’s risk aversion attitude. To verify the effectiveness and practical application of this approach, an inexact stochastic risk aversion model is developed for regional electric system planning and management in Ningxia Hui Autonomous Region, China. The series of solutions provide the decision-maker with the optimal investment strategy and operation management under different future emission reduction scenarios and risk-aversion levels. The results indicated that pollution control devices are still the main measures to achieve the current mitigation goal and the adjustment of generation structure would play an important role in the future cleaner electricity system with the stricter environmental policy. In addition, the model can be used for generating decision alternatives and helping decision-makers identify desired energy structure adjustment and pollutants/carbon mitigation abatement policies under various economic and system-reliability constraints.

  18. Empirical analysis of time preferences and risk aversion

    NARCIS (Netherlands)

    Tu, Q.

    2005-01-01

    One of the important contributions is that a structural model with the reference point and loss aversion for intertemporal choice was developed to estimate the coefficient of loss aversion and the reference points of individuals.

  19. Repeatable aversion across threat types is linked with life-history traits but is dependent on how aversion is measured.

    Science.gov (United States)

    Davidson, Gabrielle L; Reichert, Michael S; Crane, Jodie M S; O'Shea, William; Quinn, John L

    2018-02-01

    Personality research suggests that individual differences in risk aversion may be explained by links with life-history variation. However, few empirical studies examine whether repeatable differences in risk avoidance behaviour covary with life-history traits among individuals in natural populations, or how these links vary depending on the context and the way risk aversion is measured. We measured two different risk avoidance behaviours (latency to enter the nest and inspection time) in wild great tits ( Parus major ) in two different contexts-response to a novel object and to a predator cue placed at the nest-box during incubation---and related these behaviours to female reproductive success and condition. Females responded equally strongly to both stimuli, and although both behaviours were repeatable, they did not correlate. Latency to enter was negatively related to body condition and the number of offspring fledged. By contrast, inspection time was directly explained by whether incubating females had been flushed from the nest before the trial began. Thus, our inferences on the relationship between risk aversion and fitness depend on how risk aversion was measured. Our results highlight the limitations of drawing conclusions about the relevance of single measures of a personality trait such as risk aversion.

  20. Risk-averse decision-making for civil infrastructure exposed to low-probability, high-consequence events

    International Nuclear Information System (INIS)

    Cha, Eun Jeong; Ellingwood, Bruce R.

    2012-01-01

    Quantitative analysis and assessment of risk to civil infrastructure has two components: probability of a potentially damaging event and consequence of damage, measured in terms of financial or human losses. Decision models that have been utilized during the past three decades take into account the probabilistic component rationally, but address decision-maker attitudes toward consequences and risk only to a limited degree. The application of models reflecting these attitudes to decisions involving low-probability, high-consequence events that may impact civil infrastructure requires a fundamental understanding of risk acceptance attitudes and how they affect individual and group choices. In particular, the phenomenon of risk aversion may be a significant factor in decisions for civil infrastructure exposed to low-probability events with severe consequences, such as earthquakes, hurricanes or floods. This paper utilizes cumulative prospect theory to investigate the role and characteristics of risk-aversion in assurance of structural safety.

  1. On the descriptive value of loss aversion in decisions under risk: Six clarifications

    Directory of Open Access Journals (Sweden)

    Eyal Ert

    2013-05-01

    Full Text Available Previous studies of loss aversion in decisions under risk have led to mixed results. Losses appear to loom larger than gains in some settings, but not in others. The current paper clarifies these results by highlighting six experimental manipulations that tend to increase the likelihood of the behavior predicted by loss aversion. These manipulations include: (1 framing of the safe alternative as the status quo; (2 ensuring that the choice pattern predicted by loss aversion maximizes the probability of positive (rather than zero or negative outcomes; (3 the use of high nominal (numerical payoffs; (4 the use of high stakes; (5 the inclusion of highly attractive risky prospects that creates a contrast effect; and (6 the use of long experiments in which no feedback is provided and in which the computation of the expected values is difficult. In addition, the results suggest the possibility of learning in the absence of feedback: The tendency to select simple strategies, like ``maximize the worst outcome'' which implies ``loss aversion'', increases when this behavior is not costly. Theoretical and practical implications are discussed.

  2. Coping with Loss Aversion in the Newsvendor Model

    Directory of Open Access Journals (Sweden)

    Jianwu Sun

    2015-01-01

    Full Text Available We introduce loss aversion into the decision framework of the newsvendor model. By introducing the loss aversion coefficient λ, we propose a novel utility function for the loss-averse newsvendor. First, we obtain the optimal order quantity to maximize the expected utility for the loss-averse newsvendor who is risk-neutral. It is found that this optimal order quantity is smaller than the expected profit maximization order quantity in the classical newsvendor model, which may help to explain the decision bias in the classical newsvendor model. Then, to reduce the risk which originates from the fluctuation in the market demand, we achieve the optimal order quantity to maximize CVaR about utility for the loss-averse newsvendor who is risk-averse. We find that this optimal order quantity is smaller than the optimal order quantity to maximize the expected utility above and is decreasing in the confidence level α. Further, it is proved that the expected utility under this optimal order quantity is decreasing in the confidence level α, which verifies that low risk implies low return. Finally, a numerical example is given to illustrate the obtained results and some management insights are suggested for the loss-averse newsvendor model.

  3. Coordinating Contracts for Two-Stage Fashion Supply Chain with Risk-Averse Retailer and Price-Dependent Demand

    Directory of Open Access Journals (Sweden)

    Minli Xu

    2013-01-01

    Full Text Available When the demand is sensitive to retail price, revenue sharing contract and two-part tariff contract have been shown to be able to coordinate supply chains with risk neutral agents. We extend the previous studies to consider a risk-averse retailer in a two-echelon fashion supply chain. Based on the classic mean-variance approach in finance, the issue of channel coordination in a fashion supply chain with risk-averse retailer and price-dependent demand is investigated. We propose both single contracts and joint contracts to achieve supply chain coordination. We find that the coordinating revenue sharing contract and two-part tariff contract in the supply chain with risk neutral agents are still useful to coordinate the supply chain taking into account the degree of risk aversion of fashion retailer, whereas a more complex sales rebate and penalty (SRP contract fails to do so. When using combined contracts to coordinate the supply chain, we demonstrate that only revenue sharing with two-part tariff contract can coordinate the fashion supply chain. The optimal conditions for contract parameters to achieve channel coordination are determined. Numerical analysis is presented to supplement the results and more insights are gained.

  4. Explaining Asset Prices with Low Risk Aversion and Low Intertemporal Substitution

    DEFF Research Database (Denmark)

    Andreasen, Martin Møller; Jørgensen, Kasper

    model to explain asset prices with a low relative risk aversion (RRA) of 9.8 and a low intertemporal elasticity of substitution (IES) of 0:11. We also show that the proposed preferences allow an otherwise standard New Keynesian model to match the equity premium, the bond premium, and the risk-free rate......This paper extends the class of Epstein-Zin-Weil preferences with a new utility kernel that disentangles uncertainty about the consumption trend (long-run risk) from short-term variation around this trend (cyclical risk). Our estimation results show that these preferences enable the long-run risk...

  5. PERAN PRODUCT CUES AND RISK AVERSION PADA PURCHASE INTENTION DAN POST PURCHASE FEELINGS

    Directory of Open Access Journals (Sweden)

    Sri Rejeki Ekasasi

    2015-11-01

    Full Text Available AbstractThe research aimed to investigate the influence of extrinsic cues and intrinsic cues and risk aversion towards purchase intention and post-purchase feeling of counterfeited computer software and music CD. This research study collected data from two populations which are students and employee. Approximately 128 respondents involved to give respond for the survey. The analysis using Structural Equation Model (SEM show that product cues and risk aversion give different significant impact towards purchase intention and post-purchase feeling of counterfeited computer software and music CD. The research concluded that risk aversion and extrinsic cues has a significant influence to purchase intention of counterfeited computer software while it does not appear similar result to music CD. Moreover, the study revealed that for both counterfeited computer software and music CD, the purchase intention is proven to have negative significant influence towards post-purchase feelings.Keywords: risk aversion, extrinsic cues, intrinsic cues, purchase intention, post-purchase feelingsAbstrakTujuan dari penelitian ini adalah untuk melihat pengaruh atribut ekstrinsik dan intrinsic produk serta aspek menolak resiko terhadap niat beli dan perasaan paska beli software computer dan CD music bajakan. Penelitian ini diharapkan akan memperoleh sebuah model dengan pendekatan cultural dan strategi bisnis untuk memblokir atau mengurangi produk bajakan yang dapat diakses konsumen di pasar. Data primer akan dikumpulkan dari dua populasi, kelompok mahasiswa dan kelompok pekerja, dari empat kota besar di Indonesia yaitu Jakarta, Semarang, Surabaya, dan Yogyakarta. Lebih kurang 128 responden terlibat dalam penelitian ini. Hasil penelitian menunjukkan bahwa aspek atribut produk yang bersifat ekstrinsik dan aspek menolak resiko terbukti memiliki hubungan signifikan mempengaruhi niat beli software computer, akan tetapi lain tidak demikian pada niat beli CD music bajakan

  6. Loss aversion and 5HTT gene variants in adolescent anxiety

    Directory of Open Access Journals (Sweden)

    Monique Ernst

    2014-04-01

    Full Text Available Loss aversion, a well-documented behavioral phenomenon, characterizes decisions under risk in adult populations. As such, loss aversion may provide a reliable measure of risky behavior. Surprisingly, little is known about loss aversion in adolescents, a group who manifests risk-taking behavior, or in anxiety disorders, which are associated with risk-avoidance. Finally, loss aversion is expected to be modulated by genotype, particularly the serotonin transporter (SERT gene variant, based on its role in anxiety and impulsivity. This genetic modulation may also differ between anxious and healthy adolescents, given their distinct propensities for risk taking. The present work examines the modulation of loss aversion, an index of risk-taking, and reaction-time to decision, an index of impulsivity, by the serotonin-transporter-gene-linked polymorphisms (5HTTLPR in healthy and clinically anxious adolescents. Findings show that loss aversion (1 does manifest in adolescents, (2 does not differ between healthy and clinically anxious participants, and (3, when stratified by SERT genotype, identifies a subset of anxious adolescents who are high SERT-expressers, and show excessively low loss-aversion and high impulsivity. This last finding may serve as preliminary evidence for 5HTTLPR as a risk factor for the development of comorbid disorders associated with risk-taking and impulsivity in clinically anxious adolescents.

  7. Modelling risk aversion to support decision-making for controlling zoonotic livestock diseases.

    Science.gov (United States)

    van Asseldonk, M A P M; Bergevoet, R H M; Ge, L

    2013-12-01

    Zoonotic infectious livestock diseases are becoming a significant burden for both animal and human health and are rapidly gaining the attention of decision-makers who manage public health programmes. If control decisions have only monetary components, governments are generally regarded as being risk-neutral and the intervention strategy with the highest expected benefit (lowest expected net costs) should be preferred. However, preferences will differ and alternative intervention plans will prevail if (human) life and death outcomes are involved. A rational decision framework must therefore consider risk aversion in the decision-maker and controversial values related to public health. In the present study, risk aversion and its impact on both the utility for the monetary component and the utility for the non-monetary component is shown to be an important element when dealing with emerging zoonotic infectious livestock diseases and should not be ignored in the understanding and support of decision-making. The decision framework was applied to several control strategies for the reduction of human cases of brucellosis (Brucella melitensis) originating from sheep in Turkey.

  8. Heterogeneity of Loss Aversion in Pathological Gambling.

    Science.gov (United States)

    Takeuchi, Hideaki; Kawada, Ryosaku; Tsurumi, Kosuke; Yokoyama, Naoto; Takemura, Ariyoshi; Murao, Takuro; Murai, Toshiya; Takahashi, Hidehiko

    2016-12-01

    Pathological gambling (PG) is characterized by continual repeated gambling behavior despite negative consequences. PG is considered to be a disorder of altered decision-making under risk, and behavioral economics tools were utilized by studies on decision-making under risk. At the same time, PG was suggested to be a heterogeneous disorder in terms of personality traits as well as risk attitude. We aimed to examine the heterogeneity of PG in terms of loss aversion, which means that a loss is subjectively felt to be larger than the same amount of gain. Thirty-one male PG subjects and 26 male healthy control (HC) subjects underwent a behavioral economics task for estimation of loss aversion and personality traits assessment. Although loss aversion in PG subjects was not significantly different from that in HC subjects, distributions of loss aversion differed between PG and HC subjects. HC subjects were uniformly classified into three levels (low, middle, high) of loss aversion, whereas PG subjects were mostly classified into the two extremes, and few PG subjects were classified into the middle range. PG subjects with low and high loss aversion showed a significant difference in anxiety, excitement-seeking and craving intensity. Our study suggested that PG was a heterogeneous disorder in terms of loss aversion. This result might be useful for understanding cognitive and neurobiological mechanisms and the establishment of treatment strategies for PG.

  9. Health Security and Risk Aversion.

    Science.gov (United States)

    Herington, Jonathan

    2016-09-01

    Health security has become a popular way of justifying efforts to control catastrophic threats to public health. Unfortunately, there has been little analysis of the concept of health security, nor the relationship between health security and other potential aims of public health policy. In this paper I develop an account of health security as an aversion to risky policy options. I explore three reasons for thinking risk avoidance is a distinctly worthwhile aim of public health policy: (i) that security is intrinsically valuable, (ii) that it is necessary for social planning and (iii) that it is an appropriate response to decision-making in contexts of very limited information. Striking the right balance between securing and maximizing population health thus requires a substantive, and hitherto unrecognized, value judgment. Finally, I critically evaluate the current health security agenda in light of this new account of the concept and its relationship to the other aims of public health policy. © 2016 John Wiley & Sons Ltd.

  10. Suboptimal decision making by children with ADHD in the face of risk: Poor risk adjustment and delay aversion rather than general proneness to taking risks.

    Science.gov (United States)

    Sørensen, Lin; Sonuga-Barke, Edmund; Eichele, Heike; van Wageningen, Heidi; Wollschlaeger, Daniel; Plessen, Kerstin Jessica

    2017-02-01

    Suboptimal decision making in the face of risk (DMR) in children with attention-deficit hyperactivity disorder (ADHD) may be mediated by deficits in a number of different neuropsychological processes. We investigated DMR in children with ADHD using the Cambridge Gambling Task (CGT) to distinguish difficulties in adjusting to changing probabilities of choice outcomes (so-called risk adjustment) from general risk proneness, and to distinguish these 2 processes from delay aversion (the tendency to choose the least delayed option) and impairments in the ability to reflect on choice options. Based on previous research, we predicted that suboptimal performance on this task in children with ADHD would be primarily relate to problems with risk adjustment and delay aversion rather than general risk proneness. Drug naïve children with ADHD (n = 36), 8 to 12 years, and an age-matched group of typically developing children (n = 34) performed the CGT. As predicted, children with ADHD were not more prone to making risky choices (i.e., risk proneness). However, they had difficulty adjusting to changing risk levels and were more delay aversive-with these 2 effects being correlated. Our findings add to the growing body of evidence that children with ADHD do not favor risk taking per se when performing gambling tasks, but rather may lack the cognitive skills or motivational style to appraise changing patterns of risk effectively. (PsycINFO Database Record (c) 2017 APA, all rights reserved).

  11. From risk-seeking to risk-averse: The development of economic risk preference from early childhood to adulthood.

    Directory of Open Access Journals (Sweden)

    David J. Paulsen

    2012-09-01

    Full Text Available Adolescence is often described as a period of heightened risk-taking. Adolescents are notorious for impulsivity, emotional volatility, and risky behaviors such as drinking under the influence of alcohol. By contrast, we found that risk-taking declines linearly from childhood to adulthood when individuals make choices over monetary gambles. Further, with age we found increases in the sensitivity to economic risk, defined as the degree to which a preference for assured monetary gains over a risky payoff depends upon the variability in the risky payoff. These findings indicate that decisions about economic risk may follow a different developmental trajectory than other kinds of risk taking, and that changes in sensitivity to risk may be a major factor in the development of mature risk aversion.

  12. The effect of accountability on loss aversion.

    Science.gov (United States)

    Vieider, Ferdinand M

    2009-09-01

    This paper investigates the effect of accountability-the expectation on the side of the decision maker of having to justify his/her decisions to somebody else-on loss aversion. Loss aversion is commonly thought to be the strongest component of risk aversion. Accountability is found to reduce the bias of loss aversion. This effect is explained by the higher cognitive effort induced by accountability, which triggers a rational check on emotional reactions at the base of loss aversion, leading to a reduction of the latter. Connections to dual-processing models are discussed.

  13. Loss aversion and 5HTT gene variants in adolescent anxiety.

    Science.gov (United States)

    Ernst, Monique; Plate, Rista C; Carlisi, Christina O; Gorodetsky, Elena; Goldman, David; Pine, Daniel S

    2014-04-01

    Loss aversion, a well-documented behavioral phenomenon, characterizes decisions under risk in adult populations. As such, loss aversion may provide a reliable measure of risky behavior. Surprisingly, little is known about loss aversion in adolescents, a group who manifests risk-taking behavior, or in anxiety disorders, which are associated with risk-avoidance. Finally, loss aversion is expected to be modulated by genotype, particularly the serotonin transporter (SERT) gene variant, based on its role in anxiety and impulsivity. This genetic modulation may also differ between anxious and healthy adolescents, given their distinct propensities for risk taking. The present work examines the modulation of loss aversion, an index of risk-taking, and reaction-time to decision, an index of impulsivity, by the serotonin-transporter-gene-linked polymorphisms (5HTTLPR) in healthy and clinically anxious adolescents. Findings show that loss aversion (1) does manifest in adolescents, (2) does not differ between healthy and clinically anxious participants, and (3), when stratified by SERT genotype, identifies a subset of anxious adolescents who are high SERT-expressers, and show excessively low loss-aversion and high impulsivity. This last finding may serve as preliminary evidence for 5HTTLPR as a risk factor for the development of comorbid disorders associated with risk-taking and impulsivity in clinically anxious adolescents. Copyright © 2013 The Authors. Published by Elsevier Ltd.. All rights reserved.

  14. Optimal investment and indifference pricing when risk aversion is not monotone: SAHARA utility functions

    NARCIS (Netherlands)

    Chen, A.; Pelsser, A.; Vellekoop, M.

    2008-01-01

    Abstract. We develop a new class of utility functions, SAHARA utility, with the dis- tinguishing feature that they implement the assumption that agents may become less risk-averse for very low values of wealth. This means that SAHARA utility can be used to characterize risk gambling behavior of an

  15. The Unspoken Consequence of Command, Control Communications Technology: Enhanced Micromanagement by Risk-Averse Commanders

    National Research Council Canada - National Science Library

    Carozza, John

    2004-01-01

    .... However, along with its benefits, this command, control and communications (C3) network includes the dangerous consequence of eroding the autonomy of tactical command through enhanced micromanagement by risk-averse operational commanders...

  16. Potential Impact of Risk and Loss Aversion on the Process of Accepting Kidneys for Transplantation.

    Science.gov (United States)

    Heilman, Raymond L; Green, Ellen P; Reddy, Kunam S; Moss, Adyr; Kaplan, Bruce

    2017-07-01

    Behavioral economic theory suggests that people make decisions based on maximizing perceived value; however, this may be influenced more by the risk of loss rather than of potential gain. Additionally, individuals may seek certainty over uncertainty. These are termed loss aversion and risk aversion, respectively. Loss aversion is particularly sensitive to how the decision is "framed." Thus, labeling a kidney as high Kidney Donor Profile Index results in higher discard rates because this creates a nonlinearity in perceived risk. There is also evidence that the perceived loss due to regulatory sanction results in increased organ discard rates. This may be due to the overuse of terminology that stresses regulatory sanctions and thus perpetuates fear of loss through a form of nudging. Our goal is to point out how these concepts of behavioral economics may negatively influence the decision process to accept these suboptimal organs. We hope to make the community more aware of these powerful psychological influences and thus potentially increase the utilization of these suboptimal organs. Further, we would urge regulatory bodies to avoid utilizing strategies that frame outcomes in terms of loss due to flagging and build models that are less prone to uncertain expected versus observed outcomes.

  17. Scheduling of a hydro producer considering head-dependency, price scenarios and risk-aversion

    International Nuclear Information System (INIS)

    Pousinho, H.M.I.; Mendes, V.M.F.; Catalão, J.P.S.

    2012-01-01

    Highlights: ► A MIQP approach is proposed for the short-term hydro scheduling problem. ► Head-dependency, discontinuous operating regions and discharge ramping constraints are considered. ► As new contribution to earlier studies, market uncertainty is introduced in the model via price scenarios. ► Also, risk aversion is incorporated by limiting the volatility of the expected profit through CVaR. ► A case study based on one of the main Portuguese cascaded hydro systems is provided. - Abstract: In this paper, a mixed-integer quadratic programming approach is proposed for the short-term hydro scheduling problem, considering head-dependency, discontinuous operating regions and discharge ramping constraints. As new contributions to earlier studies, market uncertainty is introduced in the model via price scenarios, and risk aversion is also incorporated by limiting the volatility of the expected profit through the conditional value-at-risk. Our approach has been applied successfully to solve a case study based on one of the main Portuguese cascaded hydro systems, requiring a negligible computational time.

  18. The Influence of Financial Literacy, Risk Aversion and Expectations on Retirement Planning and Portfolio Allocation in Malaysia

    Directory of Open Access Journals (Sweden)

    Nurul Shahnaz Mahdzan

    2018-12-01

    Full Text Available The two objectives of this paper are to examine the effect of financial literacy, risk aversion and expectations on retirement planning; and, to investigate the effect of these antecedents on the retire- ment portfolio allocation. Data was collected via a self-administered questionnaire from a sample of 270 working individuals in Kuala Lumpur, Malaysia. Logistic and ordered probit regressions were employed to analyse the first and second objective, respectively. The results from the logistic regression indicate that future expectations significantly influence the probability of planning for retirement. Meanwhile, individu- als with higher financial literacy and lower risk aversion are more likely to hold risky assets in their retirement portfolios. Subsequently, two-sample t-test and one-way ANOVA tests were conducted to further examine the differences in financial literacy, risk aversion and expectations, across demographic sub-groups. The study contributes to the literature by holistically incorporating the behavioural aspects that affect retirement planning and by exploring an uncharted issue of retirement planning—namely, the retirement portfolio allocation.

  19. Multiattribute Utility Theory, Intertemporal Utility and Correlation Aversion

    DEFF Research Database (Denmark)

    Andersen, Steffen; Harrison, Glenn W.; Lau, Morten

    2018-01-01

    Convenient assumptions about qualitative properties of the intertemporal utility function have generated counterintuitive implications for the relationship between atemporal risk aversion and the intertemporal elasticity of substitution. If the intertemporal utility function is additively separable...... aversion. Our results show that subjects are correlation averse over lotteries with intertemporal income profiles....

  20. The Emotional Information Processing System is Risk Averse: Ego-Depletion and Investment Behavior

    NARCIS (Netherlands)

    B. de Langhe (Bart); S.T.L.R. Sweldens (Steven); S.M.J. van Osselaer (Stijn); M.A. Tuk (Mirjam)

    2008-01-01

    textabstractTwo experiments show that a shortage of self-regulatory resources results in more risk aversion in mixed-gamble (gain/loss) situations. The findings support a dual process view that distinguishes between a rational and an affective information processing system, in which self-regulatory

  1. Decision-making, financial risk aversion, and behavioral biases: The role of testosterone and stress.

    Science.gov (United States)

    Nofsinger, John R; Patterson, Fernando M; Shank, Corey A

    2018-05-01

    We examine the relation between testosterone, cortisol, and financial decisions in a sample of naïve investors. We find that testosterone level is positively related to excess risk-taking, whereas cortisol level is negatively related to excess risk-taking (correlation coefficient [r]: 0.75 and -0.21, respectively). Additionally, we find support for the dual-hormone hypothesis in a financial context. Specifically, the testosterone-to-cortisol ratio is significantly related to loss aversion. Individuals with a higher ratio are 3.4 times more likely to sell losing stocks (standard error [SE]: 1.63). Furthermore, we find a positive feedback loop between financial success, testosterone, and cortisol. Specifically, financial success is significantly related to higher post-trial testosterone and cortisol by a factor of 0.53 (SE: 0.14). Finally, we find that in a competitive environment, testosterone level increases significantly, leading to greater risk-taking than in noncompetitive environment. Overall, this study underscores the importance of the endocrine system on financial decision-making. The results of this study are relevant to a broad audience, including investors looking to optimize financial performance, industry human resources, market regulators, and researchers. Copyright © 2018 Elsevier B.V. All rights reserved.

  2. Simulating the market coefficient of relative risk aversion

    Directory of Open Access Journals (Sweden)

    Samih Antoine Azar

    2014-12-01

    Full Text Available In this paper, expected utility, defined by a Taylor series expansion around expected wealth, is maximized. The coefficient of relative risk aversion (CRRA that is commensurate with a 100% investment in the risky asset is simulated. The following parameters are varied: the riskless return, the market standard deviation, the market stock premium, and the skewness and the kurtosis of the risky return. Both the high extremes and the low extremes are considered. With these figures, the upper bound of the market CRRA is 3.021 and the lower bound is 0.466. Log utility, which corresponds to a CRRA of 1, is not excluded.

  3. Amygdala damage eliminates monetary loss aversion.

    Science.gov (United States)

    De Martino, Benedetto; Camerer, Colin F; Adolphs, Ralph

    2010-02-23

    Losses are a possibility in many risky decisions, and organisms have evolved mechanisms to evaluate and avoid them. Laboratory and field evidence suggests that people often avoid risks with losses even when they might earn a substantially larger gain, a behavioral preference termed "loss aversion." The cautionary brake on behavior known to rely on the amygdala is a plausible candidate mechanism for loss aversion, yet evidence for this idea has so far not been found. We studied two rare individuals with focal bilateral amygdala lesions using a series of experimental economics tasks. To measure individual sensitivity to financial losses we asked participants to play a variety of monetary gambles with possible gains and losses. Although both participants retained a normal ability to respond to changes in the gambles' expected value and risk, they showed a dramatic reduction in loss aversion compared to matched controls. The findings suggest that the amygdala plays a key role in generating loss aversion by inhibiting actions with potentially deleterious outcomes.

  4. Acute stress affects risk taking but not ambiguity aversion.

    Science.gov (United States)

    Buckert, Magdalena; Schwieren, Christiane; Kudielka, Brigitte M; Fiebach, Christian J

    2014-01-01

    Economic decisions are often made in stressful situations (e.g., at the trading floor), but the effects of stress on economic decision making have not been systematically investigated so far. The present study examines how acute stress influences economic decision making under uncertainty (risk and ambiguity) using financially incentivized lotteries. We varied the domain of decision making as well as the expected value of the risky prospect. Importantly, no feedback was provided to investigate risk taking and ambiguity aversion independent from learning processes. In a sample of 75 healthy young participants, 55 of whom underwent a stress induction protocol (Trier Social Stress Test for Groups), we observed more risk seeking for gains. This effect was restricted to a subgroup of participants that showed a robust cortisol response to acute stress (n = 26). Gambling under ambiguity, in contrast to gambling under risk, was not influenced by the cortisol response to stress. These results show that acute psychosocial stress affects economic decision making under risk, independent of learning processes. Our results further point to the importance of cortisol as a mediator of this effect.

  5. The (Null) Effect of Affective Touch on Betrayal Aversion, Altruism, and Risk Taking.

    Science.gov (United States)

    Koppel, Lina; Andersson, David; Morrison, India; Västfjäll, Daniel; Tinghög, Gustav

    2017-01-01

    Pleasant touch is thought to increase the release of oxytocin. Oxytocin, in turn, has been extensively studied with regards to its effects on trust and prosocial behavior, but results remain inconsistent. The purpose of this study was to investigate the effect of touch on economic decision making. Participants ( n = 120) were stroked on their left arm using a soft brush (touch condition) or not at all (control condition; varied within subjects), while they performed a series of decision tasks assessing betrayal aversion (the Betrayal Aversion Elicitation Task), altruism (donating money to a charitable organization), and risk taking (the Balloon Analog Risk Task). We found no significant effect of touch on any of the outcome measures, neither within nor between subjects. Furthermore, effects were not moderated by gender or attachment. However, attachment avoidance had a significant effect on altruism in that those who were high in avoidance donated less money. Our findings contribute to the understanding of affective touch-and, by extension, oxytocin-in social behavior, and decision making by showing that touch does not directly influence performance in tasks involving risk and prosocial decisions. Specifically, our work casts further doubt on the validity of oxytocin research in humans.

  6. Labor migration and risk aversion in less developed countries.

    Science.gov (United States)

    Katz, E; Stark, O

    1986-01-01

    "In this paper we question the pioneering work of Todaro, which states that rural-to-urban labor migration in less developed countries (LDCs) is an individual response to a higher urban expected income. We demonstrate that rural-to-urban labor migration is perfectly rational even if urban expected income is lower than rural income. We achieve this under a set of fairly stringent conditions: an individual decision-making entity, a one-period planning horizon, and global risk aversion. We obtain the result that a small chance of reaping a high reward is sufficient to trigger rural-to-urban labor migration." excerpt

  7. Risk aversion and institutional information disclosure on the European carbon market. A case-study of the 2006 compliance event

    International Nuclear Information System (INIS)

    Chevallier, Julien; Ielpo, Florian; Mercier, Ludovic

    2009-01-01

    This article evaluates the impact of the 2006 compliance event on changes in investors' risk aversion on the European carbon market using the newly available option prices dataset. Thus, we aim at capturing the specific event that occurred on April 2007 as the European Commission disclosed the 2006 verified emissions data. Following the methodology existing for stock indices, we recover empirically risk aversion adjustments on the period 2006-2007 by estimating first the risk-neutral distribution from option prices and second the actual distribution from futures on the European Climate Exchange. Our results show evidence of a dramatic change in the market perception of risk around the 2006 yearly compliance event that has not been assessed yet. (author)

  8. Stochastic risk-averse coordinated scheduling of grid integrated energy storage units in transmission constrained wind-thermal systems within a conditional value-at-risk framework

    International Nuclear Information System (INIS)

    Hemmati, Reza; Saboori, Hedayat; Saboori, Saeid

    2016-01-01

    In recent decades, wind power resources have been integrated in the power systems increasingly. Besides confirmed benefits, utilization of large share of this volatile source in power generation portfolio has been faced system operators with new challenges in terms of uncertainty management. It is proved that energy storage systems are capable to handle projected uncertainty concerns. Risk-neutral methods have been proposed in the previous literature to schedule storage units considering wind resources uncertainty. Ignoring risk of the cost distributions with non-desirable properties may result in experiencing high costs in some unfavorable scenarios with high probability. In order to control the risk of the operator decisions, this paper proposes a new risk-constrained two-stage stochastic programming model to make optimal decisions on energy storage and thermal units in a transmission constrained hybrid wind-thermal power system. Risk-aversion procedure is explicitly formulated using the conditional value-at-risk measure, because of possessing distinguished features compared to the other risk measures. The proposed model is a mixed integer linear programming considering transmission network, thermal unit dynamics, and storage devices constraints. The simulations results demonstrate that taking the risk of the problem into account will affect scheduling decisions considerably depend on the level of the risk-aversion. - Highlights: • Risk of the operation decisions is handled by using risk-averse programming. • Conditional value-at-risk is used as risk measure. • Optimal risk level is obtained based on the cost/benefit analysis. • The proposed model is a two-stage stochastic mixed integer linear programming. • The unit commitment is integrated with ESSs and wind power penetration.

  9. Deciding for Future Selves Reduces Loss Aversion

    Directory of Open Access Journals (Sweden)

    Qiqi Cheng

    2017-09-01

    Full Text Available In this paper, we present an incentivized experiment to investigate the degree of loss aversion when people make decisions for their current selves and future selves under risk. We find that when participants make decisions for their future selves, they are less loss averse compared to when they make decisions for their current selves. This finding is consistent with the interpretation of loss aversion as a bias in decision-making driven by emotions, which are reduced when making decisions for future selves. Our findings endorsed the external validity of previous studies on the impact of emotion on loss aversion in a real world decision-making environment.

  10. Deciding for Future Selves Reduces Loss Aversion.

    Science.gov (United States)

    Cheng, Qiqi; He, Guibing

    2017-01-01

    In this paper, we present an incentivized experiment to investigate the degree of loss aversion when people make decisions for their current selves and future selves under risk. We find that when participants make decisions for their future selves, they are less loss averse compared to when they make decisions for their current selves. This finding is consistent with the interpretation of loss aversion as a bias in decision-making driven by emotions, which are reduced when making decisions for future selves. Our findings endorsed the external validity of previous studies on the impact of emotion on loss aversion in a real world decision-making environment.

  11. An inexact mixed risk-aversion two-stage stochastic programming model for water resources management under uncertainty.

    Science.gov (United States)

    Li, W; Wang, B; Xie, Y L; Huang, G H; Liu, L

    2015-02-01

    Uncertainties exist in the water resources system, while traditional two-stage stochastic programming is risk-neutral and compares the random variables (e.g., total benefit) to identify the best decisions. To deal with the risk issues, a risk-aversion inexact two-stage stochastic programming model is developed for water resources management under uncertainty. The model was a hybrid methodology of interval-parameter programming, conditional value-at-risk measure, and a general two-stage stochastic programming framework. The method extends on the traditional two-stage stochastic programming method by enabling uncertainties presented as probability density functions and discrete intervals to be effectively incorporated within the optimization framework. It could not only provide information on the benefits of the allocation plan to the decision makers but also measure the extreme expected loss on the second-stage penalty cost. The developed model was applied to a hypothetical case of water resources management. Results showed that that could help managers generate feasible and balanced risk-aversion allocation plans, and analyze the trade-offs between system stability and economy.

  12. "Incidental fear cues increase monetary loss aversion": Correction to Schulreich, Gerhardt, and Heekeren (2016).

    Science.gov (United States)

    2016-12-01

    Reports an error in "Incidental fear cues increase monetary loss aversion" by Stefan Schulreich, Holger Gerhardt and Hauke R. Heekeren ( Emotion , 2016[Apr], Vol 16[3], 402-412). In the current article, there was an error in the Study 2 portion of the article. The fourth paragraph of the Results section should read as follows: Performing the same analyses as in Study 1, we found an effect of incidental fear cues on decision behavior. Participants accepted fewer gambles in the fearful-face condition (32.77%) than in the neutral-face condition (33.96%), with Z = -2.187, p = .027, d = -0.998 in the Wilcoxon signed-ranks test and β = 0.012, SE = 0.0053, F(1, 21) = 4.434, p = .047, partial η² = .174 in the linear regression. This suggests increased risk aversion in the fearful-face condition. Concerning personality, however, there were no significant between-subjects effects or between-within interaction effects (all ps = .349). (The following abstract of the original article appeared in record 2015-52358-001.) In many everyday decisions, people exhibit loss aversion-a greater sensitivity to losses relative to gains of equal size. Loss aversion is thought to be (at least partly) mediated by emotional-in particular, fear-related-processes. Decision research has shown that even incidental emotions, which are unrelated to the decision at hand, can influence decision making. The effect of incidental fear on loss aversion, however, is thus far unclear. In two studies, we experimentally investigated how incidental fear cues, presented during (Study 1) or before (Study 2) choices to accept or reject mixed gambles over real monetary stakes, influence monetary loss aversion. We find that the presentation of fearful faces, relative to the presentation of neutral faces, increased risk aversion-an effect that could be attributed to increased loss aversion. The size of this effect was moderated by psychopathic personality: Fearless dominance, in particular its interpersonal facet

  13. Benchmarking Discount Rate in Natural Resource Damage Assessment with Risk Aversion.

    Science.gov (United States)

    Wu, Desheng; Chen, Shuzhen

    2017-08-01

    Benchmarking a credible discount rate is of crucial importance in natural resource damage assessment (NRDA) and restoration evaluation. This article integrates a holistic framework of NRDA with prevailing low discount rate theory, and proposes a discount rate benchmarking decision support system based on service-specific risk aversion. The proposed approach has the flexibility of choosing appropriate discount rates for gauging long-term services, as opposed to decisions based simply on duration. It improves injury identification in NRDA since potential damages and side-effects to ecosystem services are revealed within the service-specific framework. A real embankment case study demonstrates valid implementation of the method. © 2017 Society for Risk Analysis.

  14. A note on risk aversion and labour market outcomes: further evidence from German survey data

    OpenAIRE

    Pfeifer, Christian

    2008-01-01

    Using the large-scale German Socio-Economic Panel, this note reports direct empirical evidence for significant correlations between risk aversion and labour market outcomes (full-time employment, temporary agency work, fixed-term contracts, employer change, quits, training, wages, and job satisfaction).

  15. The (Null Effect of Affective Touch on Betrayal Aversion, Altruism, and Risk Taking

    Directory of Open Access Journals (Sweden)

    Lina Koppel

    2017-12-01

    Full Text Available Pleasant touch is thought to increase the release of oxytocin. Oxytocin, in turn, has been extensively studied with regards to its effects on trust and prosocial behavior, but results remain inconsistent. The purpose of this study was to investigate the effect of touch on economic decision making. Participants (n = 120 were stroked on their left arm using a soft brush (touch condition or not at all (control condition; varied within subjects, while they performed a series of decision tasks assessing betrayal aversion (the Betrayal Aversion Elicitation Task, altruism (donating money to a charitable organization, and risk taking (the Balloon Analog Risk Task. We found no significant effect of touch on any of the outcome measures, neither within nor between subjects. Furthermore, effects were not moderated by gender or attachment. However, attachment avoidance had a significant effect on altruism in that those who were high in avoidance donated less money. Our findings contribute to the understanding of affective touch—and, by extension, oxytocin—in social behavior, and decision making by showing that touch does not directly influence performance in tasks involving risk and prosocial decisions. Specifically, our work casts further doubt on the validity of oxytocin research in humans.

  16. Probability Weighting and Loss Aversion in Futures Hedging

    NARCIS (Netherlands)

    Mattos, F.; Garcia, P.; Pennings, J.M.E.

    2008-01-01

    We analyze how the introduction of probability weighting and loss aversion in a futures hedging model affects decision making. Analytical findings indicate that probability weighting alone always affects optimal hedge ratios, while loss and risk aversion only have an impact when probability

  17. Possibility of dying as a unified explanation of why we discount the future, get weaker with age, and display risk-aversion.

    Science.gov (United States)

    Chowdhry, Bhagwan

    2011-01-01

    I formulate a simple and parsimonious evolutionary model that shows that because most species face a possibility of dying because of external factors, called extrinsic mortality in the biology literature, it can simultaneously explain (a) why we discount the future, (b) get weaker with age, and (c) display risk-aversion. The paper suggests that testable restrictions—across species, across time, or across genders—among time preference, aging, and risk-aversion could be analyzed in a simple framework .

  18. Flexible Multi-Objective Transmission Expansion Planning with Adjustable Risk Aversion

    Directory of Open Access Journals (Sweden)

    Jing Qiu

    2017-07-01

    Full Text Available This paper presents a multi-objective transmission expansion planning (TEP framework. Rather than using the conventional deterministic reliability criterion, a risk component based on the probabilistic reliability criterion is incorporated into the TEP objectives. This risk component can capture the stochastic nature of power systems, such as load and wind power output variations, component availability, and incentive-based demand response (IBDR costs. Specifically, the formulation of risk value after risk aversion is explicitly given, and it aims to provide network planners with the flexibility to conduct risk analysis. Thus, a final expansion plan can be selected according to individual risk preferences. Moreover, the economic value of IBDR is modeled and integrated into the cost objective. In addition, a relatively new multi-objective evolutionary algorithm called the MOEA/D is introduced and employed to find Pareto optimal solutions, and tradeoffs between overall cost and risk are provided. The proposed approach is numerically verified on the Garver’s six-bus, IEEE 24-bus RTS and Polish 2383-bus systems. Case study results demonstrate that the proposed approach can effectively reduce cost and hedge risk in relation to increasing wind power integration.

  19. Increased Loss Aversion in Unmedicated Patients with Obsessive–Compulsive Disorder

    Directory of Open Access Journals (Sweden)

    Kamila E. Sip

    2018-01-01

    Full Text Available IntroductionObsessive–compulsive disorder (OCD patients show abnormalities in decision-making and, clinically, appear to show heightened sensitivity to potential negative outcomes. Despite the importance of these cognitive processes in OCD, few studies have examined the disorder within an economic decision-making framework. Here, we investigated loss aversion, a key construct in the prospect theory that describes the tendency for individuals to be more sensitive to potential losses than gains when making decisions.MethodsAcross two study sites, groups of unmedicated OCD patients (n = 14, medicated OCD patients (n = 29, and healthy controls (n = 34 accepted or rejected a series of 50/50 gambles containing varying loss/gain values. Loss aversion was calculated as the ratio of the likelihood of rejecting a gamble with increasing potential losses to the likelihood of accepting a gamble with increasing potential gains. Decision times to accept or reject were also examined and correlated with loss aversion.ResultsUnmedicated OCD patients exhibited significantly more loss aversion compared to medicated OCD or controls, an effect that was replicated across both sites and remained significant even after controlling for OCD symptom severity, trait anxiety, and sex. Post hoc analyses further indicated that unmedicated patients’ increased likelihood to reject a gamble as its loss value increased could not be explained solely by greater risk aversion among patients. Unmedicated patients were also slower to accept than reject gambles, effects that were not found in the other two groups. Loss aversion was correlated with decision times in unmedicated patients but not in the other two groups.DiscussionThese data identify abnormalities of decision-making in a subgroup of OCD patients not taking psychotropic medication. The findings help elucidate the cognitive mechanisms of the disorder and suggest that future treatments could aim to target

  20. Increased Loss Aversion in Unmedicated Patients with Obsessive-Compulsive Disorder.

    Science.gov (United States)

    Sip, Kamila E; Gonzalez, Richard; Taylor, Stephan F; Stern, Emily R

    2017-01-01

    Obsessive-compulsive disorder (OCD) patients show abnormalities in decision-making and, clinically, appear to show heightened sensitivity to potential negative outcomes. Despite the importance of these cognitive processes in OCD, few studies have examined the disorder within an economic decision-making framework. Here, we investigated loss aversion, a key construct in the prospect theory that describes the tendency for individuals to be more sensitive to potential losses than gains when making decisions. Across two study sites, groups of unmedicated OCD patients ( n  = 14), medicated OCD patients ( n  = 29), and healthy controls ( n  = 34) accepted or rejected a series of 50/50 gambles containing varying loss/gain values. Loss aversion was calculated as the ratio of the likelihood of rejecting a gamble with increasing potential losses to the likelihood of accepting a gamble with increasing potential gains. Decision times to accept or reject were also examined and correlated with loss aversion. Unmedicated OCD patients exhibited significantly more loss aversion compared to medicated OCD or controls, an effect that was replicated across both sites and remained significant even after controlling for OCD symptom severity, trait anxiety, and sex. Post hoc analyses further indicated that unmedicated patients' increased likelihood to reject a gamble as its loss value increased could not be explained solely by greater risk aversion among patients. Unmedicated patients were also slower to accept than reject gambles, effects that were not found in the other two groups. Loss aversion was correlated with decision times in unmedicated patients but not in the other two groups. These data identify abnormalities of decision-making in a subgroup of OCD patients not taking psychotropic medication. The findings help elucidate the cognitive mechanisms of the disorder and suggest that future treatments could aim to target abnormalities of loss/gain processing during

  1. The functional and structural neural basis of individual differences in loss aversion.

    Science.gov (United States)

    Canessa, Nicola; Crespi, Chiara; Motterlini, Matteo; Baud-Bovy, Gabriel; Chierchia, Gabriele; Pantaleo, Giuseppe; Tettamanti, Marco; Cappa, Stefano F

    2013-09-04

    Decision making under risk entails the anticipation of prospective outcomes, typically leading to the greater sensitivity to losses than gains known as loss aversion. Previous studies on the neural bases of choice-outcome anticipation and loss aversion provided inconsistent results, showing either bidirectional mesolimbic responses of activation for gains and deactivation for losses, or a specific amygdala involvement in processing losses. Here we focused on loss aversion with the aim to address interindividual differences in the neural bases of choice-outcome anticipation. Fifty-six healthy human participants accepted or rejected 104 mixed gambles offering equal (50%) chances of gaining or losing different amounts of money while their brain activity was measured with functional magnetic resonance imaging (fMRI). We report both bidirectional and gain/loss-specific responses while evaluating risky gambles, with amygdala and posterior insula specifically tracking the magnitude of potential losses. At the individual level, loss aversion was reflected both in limbic fMRI responses and in gray matter volume in a structural amygdala-thalamus-striatum network, in which the volume of the "output" centromedial amygdala nuclei mediating avoidance behavior was negatively correlated with monetary performance. We conclude that outcome anticipation and ensuing loss aversion involve multiple neural systems, showing functional and structural individual variability directly related to the actual financial outcomes of choices. By supporting the simultaneous involvement of both appetitive and aversive processing in economic decision making, these results contribute to the interpretation of existing inconsistencies on the neural bases of anticipating choice outcomes.

  2. Prospect theory and body mass: characterizing psychological parameters for weight-related risk attitudes and weight-gain aversion.

    Science.gov (United States)

    Lim, Seung-Lark; Bruce, Amanda S

    2015-01-01

    We developed a novel decision-making paradigm that allows us to apply prospect theory in behavioral economics to body mass. 67 healthy young adults completed self-report measures and two decision-making tasks for weight-loss, as well as for monetary rewards. We estimated risk-related preference and loss aversion parameters for each individual, separately for weight-loss and monetary rewards choice data. Risk-seeking tendency for weight-loss was positively correlated with body mass index in individuals who desired to lose body weight, whereas the risk-seeking for momentary rewards was not. Risk-seeking for weight-loss was correlated to excessive body shape preoccupations, while aversion to weight-gain was correlated with self-reports of behavioral involvement for successful weight-loss. We demonstrated that prospect theory can be useful in explaining the decision-making process related to body mass. Applying prospect theory is expected to advance our understanding of decision-making mechanisms in obesity, which might prove helpful for improving healthy choices.

  3. Prospect theory and body mass: Characterizing psychological parameters for weight-related risk attitudes and weight-gain aversion

    Directory of Open Access Journals (Sweden)

    Seung-Lark eLim

    2015-03-01

    Full Text Available We developed a novel decision-making paradigm that allows us to apply prospect theory in behavioral economics to body mass. 67 healthy young adults completed self-report measures and two decision-making tasks for weight-loss, as well as for monetary rewards. We estimated risk-related preference and loss aversion parameters for each individual, separately for weight-loss and monetary rewards choice data. Risk-seeking tendency for weight-loss was positively correlated with body mass index in individuals who desired to lose body weight, whereas the risk-seeking for momentary rewards was not. Risk-seeking for weight-loss was correlated to excessive body shape preoccupations, while aversion to weight-gain was correlated with self-reports of behavioral involvement for successful weight-loss. We demonstrated that prospect theory can be useful in explaining the decision-making process related to body mass. Applying prospect theory is expected to advance our understanding of decision-making mechanisms in obesity, which might prove helpful for improving healthy choices.

  4. Reference-dependent preferences and loss aversion

    Directory of Open Access Journals (Sweden)

    Einat Neuman

    2008-02-01

    Full Text Available This study employs a Discrete Choice Experiment (DCE in the health-care sector to test the loss aversion theory that is derived from reference-dependent preferences: The absolute subjective value of a deviation from a reference point is generally greater when the deviation represents a loss than when the same-sized change is perceived as a gain. As far as is known, this paper is the first to use a DCE to test the loss aversion theory. A DCE is a highly suitable tool for such testing because it estimates the marginal valuations of attributes, based onextit{ deviations from a reference point} (a constant scenario. Moreover, loss aversion can be examined for extit{each attribute separately}. Another advantage of a DCE is that is can be applied toextit{ non-traded goods with non-tangible attributes}. A health-care event is used for empirical illustration: The loss aversion theory is tested within the context of preference structures for maternity-ward attributes, estimated using data gathered from 3850 observations made by a sample of 542 women who had recently given birth. Seven hypotheses are presented and tested. Overall, significant support for behavioral loss aversion theories was found. %JEL codes: D01, D12, I19

  5. Ambiguity aversion in schizophrenia: An fMRI study of decision-making under risk and ambiguity.

    Science.gov (United States)

    Fujino, Junya; Hirose, Kimito; Tei, Shisei; Kawada, Ryosaku; Tsurumi, Kosuke; Matsukawa, Noriko; Miyata, Jun; Sugihara, Genichi; Yoshihara, Yujiro; Ideno, Takashi; Aso, Toshihiko; Takemura, Kazuhisa; Fukuyama, Hidenao; Murai, Toshiya; Takahashi, Hidehiko

    2016-12-01

    When making decisions in everyday life, we often have to choose between uncertain outcomes. Economic studies have demonstrated that healthy people tend to prefer options with known probabilities (risk) than those with unknown probabilities (ambiguity), which is referred to as "ambiguity aversion." However, it remains unclear how patients with schizophrenia behave under ambiguity, despite growing evidence of their altered decision-making under uncertainty. In this study, combining economic tools and functional magnetic resonance imaging (fMRI), we assessed the attitudes toward risk/ambiguity and investigated the neural correlates during decision-making under risk/ambiguity in schizophrenia. Although no significant difference in attitudes under risk was observed, patients with schizophrenia chose ambiguity significantly more often than the healthy controls. Attitudes under risk and ambiguity did not correlate across patients with schizophrenia. Furthermore, unlike in the healthy controls, activation of the left lateral orbitofrontal cortex was not increased during decision-making under ambiguity compared to under risk in schizophrenia. These results suggest that ambiguity aversion, a well-established subjective bias, is attenuated in patients with schizophrenia, highlighting the need to distinguish between risk and ambiguity when assessing decision-making under these situations. Our findings, comprising important clinical implications, contribute to improved understanding of the mechanisms underlying altered decision-making in patients with schizophrenia. Copyright © 2016 Elsevier B.V. All rights reserved.

  6. Optimal Management of Supply Disruptions when Contracting with Unreliable, Risk-averse, Suppliers

    OpenAIRE

    Parlane, Sarah; Tsai, Ying-Yi

    2017-01-01

    This paper investigates the optimal management of supply disruptions by a manufacturer who uses order inflation and/or investments in process reliability when contracting two risk-averse suppliers. We consider that these investments can be subject to moral hazard. Technically we solve a newsvendor optimization problem using a random capacity model of disruption. In such a model, the order size does not affect the average production but impacts the probability of disruption. When investments a...

  7. Integration of risk aversion in the evaluation of the external cost of a nuclear accident

    International Nuclear Information System (INIS)

    Eeckhoudt, L.; Schieber, C.; Schneider, Th.

    1998-01-01

    Full text of publication follows: the external costs of fuel cycles used in the production of electricity are those imposed on society and environment that are not accounted for by the producers and consumers of energy. Within the evaluation of the external cost of the nuclear fuel cycle, the evaluation of a nuclear accident has to be addressed. For this purpose, the basic approach consists in calculating the expected value of various occident scenarios. the main criticism of this approach is that there is a discrepancy between the social acceptability of the risk and the average monetary value which corresponds in principle to the compensation of the consequences for each individual of the population affected by the accident. The aim of this paper is to propose a methodology for the integration of risk aversion, relying on the expected utility approach, as well as a numerical application based on the French data for the external cost of a nuclear accident. Although a huge range of values has been published for the relative risk aversion coefficient, it seems reasonable to adopt a value of 2 for the specific case of nuclear accident. This leads to an estimated multiplying coefficient approximately equal to 20 to be applied to the expected external cost of a nuclear accident corresponding to a release of about 1% of the core. In this case, the external cost of the nuclear accident is estimated to 0.046 mECU/kWh (i.e. about 50% of the total external costs of the nuclear fuel cycle estimated at 0.1 mECU/kWh with a 3% discount rate), instead of 0.0023 mECU/kWh without taking into account risk aversion. (authors)

  8. Combined Effects of Glucocorticoid and Noradrenergic Activity on Loss Aversion.

    Science.gov (United States)

    Margittai, Zsofia; Nave, Gideon; Van Wingerden, Marijn; Schnitzler, Alfons; Schwabe, Lars; Kalenscher, Tobias

    2018-01-01

    Loss aversion is a well-known behavioral regularity in financial decision making, describing humans' tendency to overweigh losses compared to gains of the same amount. Recent research indicates that stress and associated hormonal changes affect loss aversion, yet the underlying neuroendocrine mechanisms are still poorly understood. Here, we investigated the causal influence of two major stress neuromodulators, cortisol and noradrenaline, on loss aversion during financial decision making. In a double-blind, placebo-controlled between-subject design, we orally administered either the α2-adrenergic antagonist yohimbine (increasing noradrenergic stimulation), hydrocortisone, both substances, or a placebo to healthy young men. We tested the treatments' influence on a financial decision-making task measuring loss aversion and risk attitude. We found that both drugs combined, relative to either drug by itself, reduced loss aversion in the absence of an effect on risk attitude or choice consistency. Our data suggest that concurrent glucocorticoid and noradrenergic activity prompts an alignment of reward- with loss-sensitivity, and thus diminishes loss aversion. Our results have implications for the understanding of the susceptibility to biases in decision making.

  9. Neural loss aversion differences between depression patients and healthy individuals: A functional MRI investigation.

    Science.gov (United States)

    Chandrasekhar Pammi, V S; Pillai Geethabhavan Rajesh, Purushothaman; Kesavadas, Chandrasekharan; Rappai Mary, Paramban; Seema, Satish; Radhakrishnan, Ashalatha; Sitaram, Ranganatha

    2015-04-01

    Neuroeconomics employs neuroscience techniques to explain decision-making behaviours. Prospect theory, a prominent model of decision-making, features a value function with parameters for risk and loss aversion. Recent work with normal participants identified activation related to loss aversion in brain regions including the amygdala, ventral striatum, and ventromedial prefrontal cortex. However, the brain network for loss aversion in pathologies such as depression has yet to be identified. The aim of the current study is to employ the value function from prospect theory to examine behavioural and neural manifestations of loss aversion in depressed and healthy individuals to identify the neurobiological markers of loss aversion in economic behaviour. We acquired behavioural data and fMRI scans while healthy controls and patients with depression performed an economic decision-making task. Behavioural loss aversion was higher in patients with depression than in healthy controls. fMRI results revealed that the two groups shared a brain network for value function including right ventral striatum, ventromedial prefrontal cortex, and right amygdala. However, the neural loss aversion results revealed greater activations in the right dorsal striatum and the right anterior insula for controls compared with patients with depression, and higher activations in the midbrain region ventral tegmental area for patients with depression compared with controls. These results suggest that while the brain network for loss aversion is shared between depressed and healthy individuals, some differences exist with respect to differential activation of additional areas. Our findings are relevant to identifying neurobiological markers for altered decision-making in the depressed. © The Author(s) 2015 Reprints and permissions: sagepub.co.uk/journalsPermissions.nav.

  10. Study and Simulation on Dynamics of a Risk-Averse Supply Chain Pricing Model with Dual-Channel and Incomplete Information

    Science.gov (United States)

    Sun, Lijian; Ma, Junhai

    Under the industrial background of dual-channel, volatility in demand of consumers, we use the theory of bifurcations and numerical simulation tools to investigate the dynamic pricing game in a dual-channel supply chain with risk-averse behavior and incomplete information. Due to volatility of demand of consumers, we consider all the players in the supply chain are risk-averse. We assume there exist Bertrand game and Manufacturers’ Stackelberg in the chain which are closer to reality. The main objective of the paper is to investigate the complex influence of the decision parameters such as wholesale price adjustment speed, risk preference and service value on stability of the risk-averse supply chain and average utilities of all the players. We lay emphasis on the influence of chaos on average utilities of all the players which did not appear in previous studies. The dynamic phenomena, such as the bifurcation, chaos and sensitivity to initial values are analyzed by 2D bifurcation phase portraits, Double Largest Lyapunov exponent, basins of attraction and so on. The study shows that the manufacturers should slow down their wholesale price adjustment speed to get more utilities, if the manufacturers are willing to take on more risk, they will get more profits, but they must keep their wholesale prices in a certain range in order to maintain the market stability.

  11. Ambiguity aversion in rhesus macaques

    Directory of Open Access Journals (Sweden)

    Benjamin eHayden

    2010-09-01

    Full Text Available People generally prefer risky options, which have fully specified outcome probabilities, to ambiguous options, which have unspecified probabilities. This preference, formalized in economics, is strong enough that people will reliably prefer a risky option to an ambiguous option with a greater expected value. Explanations for ambiguity aversion often invoke uniquely human faculties like language, self-justification, or a desire to avoid public embarrassment. Challenging these ideas, here we demonstrate that a preference for unambiguous options is shared with rhesus macaques. We trained four monkeys to choose between pairs of options that both offered explicitly cued probabilities of large and small juice outcomes. We then introduced occasional trials where one of the options was obscured and examined their resulting preferences; we ran humans in a parallel experiment on a nearly identical task. We found that monkeys reliably preferred risky options to ambiguous ones, even when this bias was costly, closely matching the behavior of humans in the analogous task. Notably, ambiguity aversion varied parametrically with the extent of ambiguity. As expected, ambiguity aversion gradually declined as monkeys learned the underlying probability distribution of rewards. These data indicate that ambiguity aversion reflects fundamental cognitive biases shared with other animals rather than uniquely human factors guiding decisions.

  12. Moving beyond the cost-loss ratio: economic assessment of streamflow forecasts for a risk-averse decision maker

    Science.gov (United States)

    Matte, Simon; Boucher, Marie-Amélie; Boucher, Vincent; Fortier Filion, Thomas-Charles

    2017-06-01

    A large effort has been made over the past 10 years to promote the operational use of probabilistic or ensemble streamflow forecasts. Numerous studies have shown that ensemble forecasts are of higher quality than deterministic ones. Many studies also conclude that decisions based on ensemble rather than deterministic forecasts lead to better decisions in the context of flood mitigation. Hence, it is believed that ensemble forecasts possess a greater economic and social value for both decision makers and the general population. However, the vast majority of, if not all, existing hydro-economic studies rely on a cost-loss ratio framework that assumes a risk-neutral decision maker. To overcome this important flaw, this study borrows from economics and evaluates the economic value of early warning flood systems using the well-known Constant Absolute Risk Aversion (CARA) utility function, which explicitly accounts for the level of risk aversion of the decision maker. This new framework allows for the full exploitation of the information related to a forecasts' uncertainty, making it especially suited for the economic assessment of ensemble or probabilistic forecasts. Rather than comparing deterministic and ensemble forecasts, this study focuses on comparing different types of ensemble forecasts. There are multiple ways of assessing and representing forecast uncertainty. Consequently, there exist many different means of building an ensemble forecasting system for future streamflow. One such possibility is to dress deterministic forecasts using the statistics of past error forecasts. Such dressing methods are popular among operational agencies because of their simplicity and intuitiveness. Another approach is the use of ensemble meteorological forecasts for precipitation and temperature, which are then provided as inputs to one or many hydrological model(s). In this study, three concurrent ensemble streamflow forecasting systems are compared: simple statistically dressed

  13. External Cost Assessment of Nuclear Power Plant Accident considering Public Risk Aversion Behavior: the Korean Case

    Energy Technology Data Exchange (ETDEWEB)

    Lee, Sang Hun; Kang, Hyun Gook [KAIST, Daejeon (Korea, Republic of)

    2016-05-15

    The conventional approach for monetary valuation of NPP accident consequence consists of calculating the expected value of various accident scenarios. However, the main criticism of the conventional approach is that there is a discrepancy between the social acceptability of the risk and the estimated expected value of NPP accident. Therefore, an integrated framework for the estimation of the external cost associated with an NPP accident considering the public risk aversion behavior was proposed in this study based on the constructed theoretical framework for estimating both the value of statistical life (VSL) and the risk aversion coefficient associated with an NPP accident to take account of the accident cost into the unit electricity generation cost of NPP. To estimate both parameters, an individual-level survey was conducted on a sample of 1,364 participants in Korea. Based on the collected survey responses, both parameters were estimated based on the proposed framework and the external cost of NPP accident was estimated based on the consequence analysis and considering the direct cost factors for NPP accident. Internalization of external costs into the comprehensive energy production cost has been considered as a potentially efficient policy instrument for a more sustainable energy supply and use. However, the internalization of externalities, such as public health damage, have raised a number of generic policy issues in a nuclear energy sector, with specific challenges resulting from the distinct characteristics of external cost estimation. Especially, the major challenge remained to address the public safety concerns regarding a nuclear accident, which can be specified as low-probability high-consequence accident, driven by the aspects of public risk aversion.

  14. External Cost Assessment of Nuclear Power Plant Accident considering Public Risk Aversion Behavior: the Korean Case

    International Nuclear Information System (INIS)

    Lee, Sang Hun; Kang, Hyun Gook

    2016-01-01

    The conventional approach for monetary valuation of NPP accident consequence consists of calculating the expected value of various accident scenarios. However, the main criticism of the conventional approach is that there is a discrepancy between the social acceptability of the risk and the estimated expected value of NPP accident. Therefore, an integrated framework for the estimation of the external cost associated with an NPP accident considering the public risk aversion behavior was proposed in this study based on the constructed theoretical framework for estimating both the value of statistical life (VSL) and the risk aversion coefficient associated with an NPP accident to take account of the accident cost into the unit electricity generation cost of NPP. To estimate both parameters, an individual-level survey was conducted on a sample of 1,364 participants in Korea. Based on the collected survey responses, both parameters were estimated based on the proposed framework and the external cost of NPP accident was estimated based on the consequence analysis and considering the direct cost factors for NPP accident. Internalization of external costs into the comprehensive energy production cost has been considered as a potentially efficient policy instrument for a more sustainable energy supply and use. However, the internalization of externalities, such as public health damage, have raised a number of generic policy issues in a nuclear energy sector, with specific challenges resulting from the distinct characteristics of external cost estimation. Especially, the major challenge remained to address the public safety concerns regarding a nuclear accident, which can be specified as low-probability high-consequence accident, driven by the aspects of public risk aversion

  15. Coordination of a Random Yield Supply Chain with a Loss-Averse Supplier

    Directory of Open Access Journals (Sweden)

    Jiarong Luo

    2015-01-01

    Full Text Available This paper investigates the coordination of a supply chain consisting of a loss-averse supplier and a risk-neutral buyer who orders products from the supplier who suffers from random yield to meet a deterministic demand. We derive the risk-neutral buyer’s optimal order policy and the loss-averse supplier’s optimal production policy under shortage-penalty-surplus-subsidy (SPSS contracts. We also analyze the impacts of loss aversion on the loss-averse supplier’s production decision making and find that the loss-averse supplier may produce less than, equal to, or more than the risk-neutral supplier. Then, we provide explicit conditions on which the random yield supply chain with a loss-averse supplier can be coordinated under SPSS contracts. Finally, adopting numerical examples, we find that when the shortage penalty is low, the buyer’s optimal order quantity will increase, while the supplier’s optimal production quantity will first decrease and then increase as the loss aversion level increases. When the shortage penalty is high, the buyer’s optimal order quantity will decrease but the supplier’s optimal production quantity will always increase as the loss aversion level increases. Furthermore, the numerical examples provide strong evidence for the view that SPSS contracts can effectively improve the performance of the whole supply chain.

  16. Which currency to set price? A model of multiple countries and risk averse firm

    OpenAIRE

    Jian Wang

    2004-01-01

    A crucial question centering many recent debates in the international macroeconomics is under which currency the price is sticky. This paper provides a microfoundation to study the firm¡¦s choice of price setting currency in the sticky price model. I first prove that the risk preference is a secondary consideration in the choice of the price setting currency. This result questions the claim that the currency forward market can change the currency choice of risk averse firms. Then I extend the...

  17. Risk and Interaction Aversion: Screening Mechanisms in the Prisoner's Dilemma Game

    Science.gov (United States)

    Canova, Gabriel A.; Arenzon, Jeferson J.

    2017-09-01

    When the interactions between cooperators (C) and defectors (D) can be partially avoided within a population, there may be an overall enhancement of cooperation. One example of such screening mechanism occurs in the presence of risk-averse agents (loners, L) that are neutral towards others, i.e., both L and its opponent, whatever its strategy, receive the same payoff. Their presence in the Prisoner's Dilemma (PD) game sustains the coexistence of cooperators and defectors far beyond the level attained in their absence. Another screening mechanism is a heterogeneous landscape obtained, for example, by site diluting the lattice. In this case, cooperation is enhanced with some fraction of such inactive, interaction-averse sites. By considering the interplay of both mechanisms, we show that there is an explosive increase in the range of densities, just above the percolation threshold, where neutrality is prevented and loners become extinct, the behavior reverting to the pure PD game. Interestingly, this occurs despite defectors being usually abundant in that region. This has to be compared with the corresponding loner-free region in the undiluted case that, besides being very small, is dominated by cooperators.

  18. A simultaneous approach to the estimation of risk aversion and the subjective time discount rate

    NARCIS (Netherlands)

    Booij, A.S.; van Praag, B.M.S.

    2009-01-01

    In this paper we analyze a sample of 1832 individuals who responded to six randomly generated lottery questions that differ with respect to chance, prize and the timing of the draw. Using a model that explicitly allows for consumption smoothing, we obtain an estimate of relative risk aversion of 82.

  19. Risk aversion, time preference, and the social cost of carbon

    International Nuclear Information System (INIS)

    Anthoff, David; Tol, Richard S J; Yohe, Gary W

    2009-01-01

    The Stern Review reported a social cost of carbon of over $300/tC, calling for ambitious climate policy. We here conduct a systematic sensitivity analysis of this result on two crucial parameters: the rate of pure time preference, and the rate of risk aversion. We show that the social cost of carbon lies anywhere in between 0 and $120 000/tC. However, if we restrict these two parameters to matching observed behaviour, an expected social cost of carbon of $60/tC results. If we correct this estimate for income differences across the world, the social cost of carbon rises to over $200/tC.

  20. Research on closed-loop supply chain network equilibrium with two-type suppliers, risk-averse manufacturers and capacity constraints

    Directory of Open Access Journals (Sweden)

    Hao Sun

    2015-04-01

    Full Text Available Purpose: the aim of this paper is to investigate the closed-loop supply chain (CLSC network equilibrium wiht the consideration of three practical factors: two complementary types of suppliers, risk-averse character of the manufacturer and capacity constraints of the suppliers. Design/methodology/approach: The equilibrium of various decision makers including the suppliers, the manufacturers, the retailers, the collectors and the demand markets are modeled via finite-dimensional variational inequality, respectively. Then the governing CLSC network equilibrium model is established. The logarithmic-quadratic proximal prediction-correction algorithm is designed to solve the variational inequality model. Numerical examples are given to analyze the impact of return rate, risk-averse degree and capacity constraints on the network equilibrium under different product BOMs. Findings: with the increase of return rate, the profits of various channel members and the performance of the CLSC system will improve. There is a contradiction between profit maximization and risk minimization for the manufacturers. Moreover, the economic behavior of the CLSC is likely to be limited by the capacity constraints of the suppliers. Originality/value: Prior to this paper, few papers have addressed with the CLSC network equilibrium considering some practical factors. They assume all the suppliers are identical and all the decision-makers are risk neutral. Furthermore, the production capacities of all suppliers are assumed to be infinite or large enough. To fill the gap, this paper examines the influences of two-type suppliers, risk aversion and capacity constraints upon the CLSC network equilibrium.

  1. Regret Aversion Bias dan Risk Tolerance Investor Muda Jakarta dan Surabaya

    Directory of Open Access Journals (Sweden)

    Yohnson Yohnson

    2008-01-01

    Full Text Available Investment decision behavior is an interesting topic in finance research. Bailey and Kinerson’s (2005 research found that individual risk tolerance and experienced regret significantly influenced investment decisions. Anticipation of potential future regret did not predict subsequent investment decision behavior. Specifically, this research also wants to know the effects of a person’s experienced regret and anticipated regret or the effects of individual risk tolerance on investment decision behavior in Jakarta and Surabaya. Respondent of this research is 323 students from UK Petra who represent young investors from Surabaya and students from UPH who represent young investors from Jakarta. The method of research is experimental study and the design of research is 2x2x2 (between subject with experienced regret (time deposit and stock as first variable, anticipated regret (time deposit and stock as second variable and risk tolerance (high and low as third variable This study finds that an individual risk tolerance significantly influences decisions. Regret aversion bias does not influence young investors in Indonesia. (We assume that it is because the character of Indonesian investors is different from foreign investors. The couse of this is supposedly the unique characteristics of Indonesian investors and the different view points between Indonesian investors and investors from other countries. Abstract in Bahasa Indonesia: Perilaku keputusan investasi sangat menarik untuk diteliti. Dalam penelitian Bailey dan Kinerson (2005 ditemukan risk tolerance dan experienced regret mempengaruhi keputusan investasi. Anticipated regret tidak dapat dipakai sebagai predictor perilaku keputusan investasi. Penelitian ini juga ingin mengetahui experienced regret, anticipated regret atau risk tolerance yang lebih mempengaruhi perilaku keputusan investasi di Jakarta dan Surabaya. Responden yang diteliti sebesar 323 mahasiswa berasal dari UK Petra yang mewakili

  2. Children do not exhibit ambiguity aversion despite intact familiarity bias.

    Science.gov (United States)

    Li, Rosa; Brannon, Elizabeth M; Huettel, Scott A

    2014-01-01

    The phenomenon of ambiguity aversion, in which risky gambles with known probabilities are preferred over ambiguous gambles with unknown probabilities, has been thoroughly documented in adults but never measured in children. Here, we use two distinct tasks to investigate ambiguity preferences of children (8- to 9-year-olds) and a comparison group of adults (19- to 27-year-olds). Across three separate measures, we found evidence for significant ambiguity aversion in adults but not in children and for greater ambiguity aversion in adults compared to children. As ambiguity aversion in adults has been theorized to result from a preference to bet on the known and avoid the unfamiliar, we separately measured familiarity bias and found that children, like adults, are biased towards the familiar. Our findings indicate that ambiguity aversion emerges across the course of development between childhood and adolescence, while a familiarity bias is already present in childhood.

  3. A time consistent risk averse three-stage stochastic mixed integer optimization model for power generation capacity expansion

    International Nuclear Information System (INIS)

    Pisciella, P.; Vespucci, M.T.; Bertocchi, M.; Zigrino, S.

    2016-01-01

    We propose a multi-stage stochastic optimization model for the generation capacity expansion problem of a price-taker power producer. Uncertainties regarding the evolution of electricity prices and fuel costs play a major role in long term investment decisions, therefore the objective function represents a trade-off between expected profit and risk. The Conditional Value at Risk is the risk measure used and is defined by a nested formulation that guarantees time consistency in the multi-stage model. The proposed model allows one to determine a long term expansion plan which takes into account uncertainty, while the LCoE approach, currently used by decision makers, only allows one to determine which technology should be chosen for the next power plant to be built. A sensitivity analysis is performed with respect to the risk weighting factor and budget amount. - Highlights: • We propose a time consistent risk averse multi-stage model for capacity expansion. • We introduce a case study with uncertainty on electricity prices and fuel costs. • Increased budget moves the investment from gas towards renewables and then coal. • Increased risk aversion moves the investment from coal towards renewables. • Time inconsistency leads to a profit gap between planned and implemented policies.

  4. Risk Aversion and Effort in an Incentive Pay Scheme with Multiplicative Noise: Theory and Experimental Evidence

    NARCIS (Netherlands)

    N.V. Zubanov (Nick)

    2012-01-01

    textabstractThe application of the classical "linear" model of incentive pay to the case when the noise is multiplicative to effort generates two predictions for a given strength of incentives: 1) more risk-averse workers will put in less effort, and 2) setting a performance target will weaken the

  5. Interoceptive ability predicts aversion to losses.

    Science.gov (United States)

    Sokol-Hessner, Peter; Hartley, Catherine A; Hamilton, Jeffrey R; Phelps, Elizabeth A

    2015-01-01

    Emotions have been proposed to inform risky decision-making through the influence of affective physiological responses on subjective value. The ability to perceive internal body states, or "interoception" may influence this relationship. Here, we examined whether interoception predicts participants' degree of loss aversion, which has been previously linked to choice-related arousal responses. Participants performed both a heartbeat-detection task indexing interoception and a risky monetary decision-making task, from which loss aversion, risk attitudes and choice consistency were parametrically measured. Interoceptive ability correlated selectively with loss aversion and was unrelated to the other value parameters. This finding suggests that specific and separable component processes underlying valuation are shaped not only by our physiological responses, as shown in previous findings, but also by our interoceptive access to such signals.

  6. Complex dynamics of a MC-MS pricing model for a risk-averse supply chain with after-sale investment

    Science.gov (United States)

    Ma, Junhai; Sun, Lijian

    2015-09-01

    In this paper, we investigate the pricing strategy of the manufacturers and that of a common retailer, including their after-sale investment in a risk-averse supply chain. As the demand is not always for sure, the supply chain follows Manufacturers Cooperating (MC) and Manufacturers Stackelberg (MS). The main objective of the paper is to investigate the influence of the decision parameters such as the after-sale investment, wholesale price adjustment speed and risk preference on the stability and utilities of the risk-averse supply chain. The dynamic phenomena, such as the bifurcation, chaos and sensitivity to initial values are analyzed with 2D-bifurcation diagrams, double largest Lyapunov exponent and basins of attraction. The study shows that the faster the adjustment speed is, the more profits the retailer can make, but on the other hand, it is no good to manufacturers. Risk tolerance levels (RM and RR) affect the utility of the manufacturers and that of the retailer differently. A feedback control method is used to control the chaos in the supply chain.

  7. Alcohol-Aversion Therapy: Relation Between Strength of Aversion and Abstinence.

    Science.gov (United States)

    Cannon, Dale S.; And Others

    1986-01-01

    Assessed degree of alcohol aversion in 60 alcoholics who received emetic alcohol-aversion therapy. Results revealed changes in response to alcoholic, but not to nonalcoholic, flavors, including decreased consumption in taste tests, more negative flavor ratings, overt behavioral indicants of aversion and increased tachycardiac response. (Author/NB)

  8. Serotonin 2A receptors contribute to the regulation of risk-averse decisions

    DEFF Research Database (Denmark)

    Macoveanu, Julian; Rowe, James B; Hornboll, Bettina

    2013-01-01

    Pharmacological studies point to a role of the neurotransmitter serotonin (5-HT) in regulating the preference for risky decisions, yet the functional contribution of specific 5-HT receptors remains to be clarified. We used pharmacological fMRI to investigate the role of the 5-HT2A receptors...... in processing negative outcomes and regulating risk-averse behavior. During fMRI, twenty healthy volunteers performed a gambling task under two conditions: with or without blocking the 5-HT2A receptors. The volunteers repeatedly chose between small, likely rewards and large, unlikely rewards. Choices were...

  9. Who's Afraid of the Big Bad Wolf? Risk Aversion and Gender Discrimination in Assessment

    OpenAIRE

    Jason Hartford and Nic Spearman

    2014-01-01

    This study exploits a natural experiment to evaluate the gender bias effect associated with negative marking due to gender-differentiated risk aversion. This approach avoids framing effects that characterize experimental evaluation of negative marking assessments. Evidence of a gender bias against female students is found. Quantile regressions indicate that female students in higher quantiles are substantially more adversely affected by negative marking. This distribution effect has been over...

  10. Investigating Gender Differences under Time Pressure in Financial Risk Taking.

    Science.gov (United States)

    Xie, Zhixin; Page, Lionel; Hardy, Ben

    2017-01-01

    There is a significant gender imbalance on financial trading floors. This motivated us to investigate gender differences in financial risk taking under pressure. We used a well-established approach from behavior economics to analyze a series of risky monetary choices by male and female participants with and without time pressure. We also used second to fourth digit ratio (2D:4D) and face width-to-height ratio (fWHR) as correlates of pre-natal exposure to testosterone. We constructed a structural model and estimated the participants' risk attitudes and probability perceptions via maximum likelihood estimation under both expected utility (EU) and rank-dependent utility (RDU) models. In line with existing research, we found that male participants are less risk averse and that the gender gap in risk attitudes increases under moderate time pressure. We found that female participants with lower 2D:4D ratios and higher fWHR are less risk averse in RDU estimates. Males with lower 2D:4D ratios were less risk averse in EU estimations, but more risk averse using RDU estimates. We also observe that men whose ratios indicate a greater prenatal exposure to testosterone exhibit a greater optimism and overestimation of small probabilities of success.

  11. Innovation and risk-averse firms: Options on carbon allowances as a hedging tool

    International Nuclear Information System (INIS)

    Szolgayová, Jana; Golub, Alexander; Fuss, Sabine

    2014-01-01

    In a regulated world where government seeks to decarbonize the energy sector, firms face both indirect and direct costs of emitting CO 2 . This study seeks to take the perspective of the firm, which needs to maximize profits implying minimization of (carbon) cost as well. In this study, the firm can compose the cost-optimal portfolio of (a) investing into carbon-saving technology, which is currently expensive, (b) investing into carbon-saving technology R and D and adopt this technology at a later point, (c) buying allowances per ton of emitted CO 2 in a carbon market (alternatively this could be formulated as a tax), and (d) buying offsets traded in the same market, which are based on reduced emissions from deforestation and degradation (REDD+). Uncertainties in the cost of carbon coming from a lack of commitment in policy-making leading to fluctuations in markets and uncertainty in the payoff of R and D activities could provide disincentives to incur large up-front sunk cost and raise the economic value of being flexible. We apply a real options approach with stochastic carbon-saving technology costs and stochastic CO 2 costs. Assuming that firms are risk-averse, they will not only value flexibility, but also risk reductions from diversification over the different (carbon mitigation) options. - Highlights: • We study the compliance problem of a private firm under both regulatory and technological uncertainty in an optimal control setting. • When firms are risk-averse, forest-backed offset options will be part of the compliance portfolio. • R and D creates valuable options on new technology

  12. A tri-reference point theory of decision making under risk.

    Science.gov (United States)

    Wang, X T; Johnson, Joseph G

    2012-11-01

    The tri-reference point (TRP) theory takes into account minimum requirements (MR), the status quo (SQ), and goals (G) in decision making under risk. The 3 reference points demarcate risky outcomes and risk perception into 4 functional regions: success (expected value of x ≥ G), gain (SQ G > SQ. We present TRP assumptions and value functions and a mathematical formalization of the theory. We conducted empirical tests of crucial TRP predictions using both explicit and implicit reference points. We show that decision makers consider both G and MR and give greater weight to MR than G, indicating failure aversion (i.e., the disutility of a failure is greater than the utility of a success in the same task) in addition to loss aversion (i.e., the disutility of a loss is greater than the utility of the same amount of gain). Captured by a double-S shaped value function with 3 inflection points, risk preferences switched between risk seeking and risk aversion when the distribution of a gamble straddled a different reference point. The existence of MR (not G) significantly shifted choice preference toward risk aversion even when the outcome distribution of a gamble was well above the MR. Single reference point based models such as prospect theory cannot consistently account for these findings. The TRP theory provides simple guidelines for evaluating risky choices for individuals and organizational management. (PsycINFO Database Record (c) 2012 APA, all rights reserved).

  13. Altered risk-aversion and risk-taking behaviour in patients with Alzheimer's disease.

    Science.gov (United States)

    Ha, Juwon; Kim, Eun-Jin; Lim, Sewon; Shin, Dong-Won; Kang, Yeo-Jin; Bae, Seung-Min; Yoon, Hyung-Kun; Oh, Kang-Seob

    2012-09-01

    Normal individuals are risk averse for decisions framed as gains but risk taking for decisions framed as losses. This framing effect is supposed to be attenuated in Alzheimer's disease (AD) patients. We investigated the effects of highlighting rewards versus highlighting punishments on the risky decision-making of AD patients. Fourteen mild to moderate AD patients (Mini-Mental Status Examination score, 11-23; Clinical Dementia Rating, 1-2) and 16 healthy volunteers were recruited for the study. Subjects completed a computerized task on risky decision-making in which mathematically equivalent dilemmas were presented in terms of opportunities to gain monetary rewards ('positive frame') or avoid suffering losses ('negative frame'). As expected, AD patients chose more risky options under the positive frame than the negative frame, contrary to the control group (Z =-2.671, P= 0.007). The normal difference in the distribution of risky choices between positively and negatively framed dilemmas was significantly reduced in the AD group after we adjusted for years of education, mean age and depression (F= 5.321, P= 0.030). Deliberation time did not differ significantly between the two groups. These results suggest that AD patients making high-risk choices is associated with attenuated sensitivity to the emotional frames that highlight rewards or punishments, possibly reflecting altered evaluations of prospective gains and losses. © 2012 The Authors. Psychogeriatrics © 2012 Japanese Psychogeriatric Society.

  14. Deciding for Others Reduces Loss Aversion

    DEFF Research Database (Denmark)

    Andersson, Ola; Holm, Håkan J.; Tyran, Jean-Robert Karl

    2016-01-01

    We study risk taking on behalf of others, both when choices involve losses and when they do not. A large-scale incentivized experiment with subjects randomly drawn from the Danish population is conducted. We find that deciding for others reduces loss aversion. When choosing between risky prospects...... when losses loom. This finding is consistent with an interpretation of loss aversion as a bias in decision making driven by emotions and that these emotions are reduced when making decisions for others....... for which losses are ruled out by design, subjects make the same choices for themselves as for others. In contrast, when losses are possible, we find that the two types of choices differ. In particular, we find that subjects who make choices for themselves take less risk than those who decide for others...

  15. On Loss Aversion, Level-1 Reasoning, and Betting

    OpenAIRE

    Ido Erev; Sharon Gilat-Yihyie; Davide Marchiori; Doron Sonsino

    2013-01-01

    Previous research suggests that human reaction to risky opportunities reflects two contradicting biases: Òloss aversion", and Òlimited level of reasoning" that leads to overconfidence. Rejection of attractive gambles is explained by loss aversion, while counterproductive risk seeking is attributed to limited level of reasoning. The current research highlights a shortcoming of this popular (but often implicit) "contradicting biases" assertion. Studies of "negative-sum betting games" reveal hig...

  16. Assessing the Impact of the Funding Environment on Researchers' Risk Aversion: The Use of Citation Statistics

    Science.gov (United States)

    Zoller, Frank A.; Zimmerling, Eric; Boutellier, Roman

    2014-01-01

    The funding environment has a profound impact on researchers' behavior. In particular, it influences their freedom and readiness to conduct research ventures with highly uncertain outcomes. In this conceptual paper, we propose a concise new methodology to evaluate researchers' risk aversion based on citation statistics. The derived…

  17. Determinants of Propranolol's Selective Effect on Loss Aversion.

    Science.gov (United States)

    Sokol-Hessner, Peter; Lackovic, Sandra F; Tobe, Russell H; Camerer, Colin F; Leventhal, Bennett L; Phelps, Elizabeth A

    2015-07-01

    Research on emotion and decision making has suggested that arousal mediates risky decisions, but several distinct and often confounded processes drive such choices. We used econometric modeling to separate and quantify the unique contributions of loss aversion, risk attitudes, and choice consistency to risky decision making. We administered the beta-blocker propranolol in a double-blind, placebo-controlled within-subjects study, targeting the neurohormonal basis of physiological arousal. Matching our intervention's pharmacological specificity with a quantitative model delineating decision-making components allowed us to identify the causal relationships between arousal and decision making that do and do not exist. Propranolol selectively reduced loss aversion in a baseline- and dose-dependent manner (i.e., as a function of initial loss aversion and body mass index), and did not affect risk attitudes or choice consistency. These findings provide evidence for a specific, modulatory, and causal relationship between precise components of emotion and risky decision making. © The Author(s) 2015.

  18. Loss-Averse Retailer’s Optimal Ordering Policies for Perishable Products with Customer Returns

    Directory of Open Access Journals (Sweden)

    Xu Chen

    2014-01-01

    Full Text Available We investigate the loss-averse retailer’s ordering policies for perishable product with customer returns. With the introduction of the segmental loss utility function, we depict the retailer’s loss aversion decision bias and establish the loss-averse retailer’s ordering policy model. We derive that the loss-averse retailer’s optimal order quantity with customer returns exists and is unique. By comparison, we obtain that both the risk-neutral and the loss-averse retailer’s optimal order quantities depend on the inventory holding cost and the marginal shortage cost. Through the sensitivity analysis, we also discuss the effect of loss-averse coefficient and the ratio of return on the loss-averse retailer’s optimal order quantity with customer returns.

  19. Coordinating a Supply Chain with Risk-Averse Agents under Demand and Consumer Returns Uncertainty

    Directory of Open Access Journals (Sweden)

    Jian Liu

    2013-01-01

    Full Text Available This paper examines the optimal order decision in a supply chain when it faces uncertain demand and uncertain consumer returns. We build consumer returns model with decision-makers’ risk preference under mean-variance objective framework and discuss supply chain coordination problem under wholesale-price-only policy and the manufacturer’s buyback policy, respectively. We find that, with wholesale price policy, the supply chain cannot be coordinated whether the supply chain agents are risk-neutral or risk-averse. However, with buyback policy, the supply chain can be coordinated and the profit of the supply chain can be arbitrarily allocated between the manufacturer and the retailer. Through numerical examples, we illustrate the impact of stochastic consumer returns and the supply chain agents’ risk attitude on the optimal order decision.

  20. Playing it safe but losing anyway--serotonergic signaling of negative outcomes in dorsomedial prefrontal cortex in the context of risk-aversion.

    Science.gov (United States)

    Macoveanu, Julian; Rowe, James B; Hornboll, Bettina; Elliott, Rebecca; Paulson, Olaf B; Knudsen, Gitte M; Siebner, Hartwig R

    2013-08-01

    Risk avoidance is an important determinant of human behavior. The neurotransmitter serotonin has been implicated in processing negative outcomes caused by risky decisions. However, it is unclear whether serotonin provides a neurobiological link between making a risk aversive decision and the response to a negative outcome. Using pharmacological fMRI, we manipulated the availability of serotonin in healthy volunteers while performing a gambling task. The same group of participants was studied in three fMRI sessions: (i) during intravenous administration of the SSRI citalopram to increase the serotonergic tone, (ii) after acute tryptophan depletion (ATD) to reduce central serotonin levels, or (iii) without interventions. ATD and citalopram had opposite effects on outcome related activity in dorsomedial prefrontal cortex (dmPFC) and amygdala. Relative to the control condition, ATD increased and citalopram decreased the neural response to negative outcomes in dmPFC. Conversely, ATD decreased and citalopram increased the neural response to negative outcomes in left amygdala. Critically, these pharmacological effects were restricted to negative outcomes that were caused by low-risk decisions and led to a high missed reward. ATD and citalopram did not alter the neural response to positive outcomes in dmPFC, but relative to ATD, citalopram produced a bilateral increase in the amygdala response to large wins caused by high-risk choices. The results show a selective involvement of the serotonergic system in neocortical processing of negative outcomes resulting from risk-averse decisions, thereby linking risk aversion and processing of negative outcomes in goal-directed behaviors. Copyright © 2012 Elsevier B.V. and ECNP. All rights reserved.

  1. Drugs and taste aversion

    International Nuclear Information System (INIS)

    Rondeau, D.B.; Jolicoeur, F.B.; Merkel, A.D.; Wayner, M.J.

    1981-01-01

    The literature on the effects of drugs on the acquisition and the magnitude of taste aversion is reviewed and discussed. Then, the results of a series of experiments on the effects of phenobarbital and related drugs on taste aversion are reported. A standard taste aversion model was used in all experiments; test drugs were injected prior to drinking in a one bottle situation on the first test day following the taste aversion treatment. Phenobarbital in doses ranging from 20 to 80 mg/kg significantly attenuated taste aversion induced by lithium chloride (LiCl) and x-radiation, the maximal effect occurred with the 60 mg/kg dose. The attenuating effect was found to be dependent upon the magnitude of the aversion to the sapid solution. Phenobarbital completely abolished aversion produced by 0.375 mEq LiCl while the attenuation effect decreased linearly with higher doses of LiCl. Results also indicate that phenobarbital's attenuating effect cannot be solely attributed to its dipsogenic characteristic or to its state dependent learning effect. Attenuation of LiCl aversion to a saccharin solution was also observed following single doses of amobarbital, 30 mg/kg, pentobarbital, 15 mg/kg, and chloropromazine, 0.75 mg/kg. Taste aversion was not affected by other doses of those drugs or by hexobarbital, barbital, and chlordiazepoxide. Phenobarbital's attenuating effect on taste aversion is discussed in relation to other known behavioral and neurophysiological effects of the drug

  2. In uncertainty we trust: a median voter model with risk aversion

    Directory of Open Access Journals (Sweden)

    Pavel A. Yakovlev

    2011-12-01

    Full Text Available The principal-agent problem and uncertainty are some of the key factors affecting financial and political markets. Fear of the unknown plays an important role in human decision making, including voting. This article describes a theoretical model where voter risk aversion towards uncertainty gives political incumbents a significant advantage over their challengers, exacerbating the principal-agent problem between voters and legislators. The model presented predicts that a rise in voter uncertainty concerning the challenger allows the incumbent to deviate from the median voter’s policy preference without losing the election. This model reconciles the paradoxical coexistence of ideological shirking and high incumbent reelection rates without abandoning the elegant median voter framework.

  3. Loss Aversion Reflects Information Accumulation, Not Bias: A Drift-Diffusion Model Study.

    Science.gov (United States)

    Clay, Summer N; Clithero, John A; Harris, Alison M; Reed, Catherine L

    2017-01-01

    Defined as increased sensitivity to losses, loss aversion is often conceptualized as a cognitive bias. However, findings that loss aversion has an attentional or emotional regulation component suggest that it may instead reflect differences in information processing. To distinguish these alternatives, we applied the drift-diffusion model (DDM) to choice and response time (RT) data in a card gambling task with unknown risk distributions. Loss aversion was measured separately for each participant. Dividing the participants into terciles based on loss aversion estimates, we found that the most loss-averse group showed a significantly lower drift rate than the other two groups, indicating overall slower uptake of information. In contrast, neither the starting bias nor the threshold separation (barrier) varied by group, suggesting that decision thresholds are not affected by loss aversion. These results shed new light on the cognitive mechanisms underlying loss aversion, consistent with an account based on information accumulation.

  4. Multi-market energy procurement for a large consumer using a risk-aversion procedure

    Energy Technology Data Exchange (ETDEWEB)

    Zare, Kazem [Tarbiat Modares University, Tehran, P.O. Box 14115-111 (Iran); Conejo, Antonio J. [Castilla-La Mancha University, Ciudad Real (Spain); Carrion, Miguel [Castilla-La Mancha University, Toledo (Spain); Moghaddam, Mohsen Parsa [Tarbiat Modares University, Tehran (Iran)

    2010-01-15

    This paper provides a technique to derive the bidding strategy in the day-ahead market of a large consumer that procures its electricity demand in both the day-ahead market and a subsequent adjustment market. Price uncertainty is modeled using concepts derived from information gap decision theory, which allows deriving robust decisions with respect to price volatility. Risk aversion is built implicitly within the proposed model. Correlations among prices in the day-ahead and the adjustment markets are properly modeled. The proposed technique is illustrated through a realistic case study. (author)

  5. Multi-market energy procurement for a large consumer using a risk-aversion procedure

    International Nuclear Information System (INIS)

    Zare, Kazem; Conejo, Antonio J.; Carrion, Miguel; Moghaddam, Mohsen Parsa

    2010-01-01

    This paper provides a technique to derive the bidding strategy in the day-ahead market of a large consumer that procures its electricity demand in both the day-ahead market and a subsequent adjustment market. Price uncertainty is modeled using concepts derived from information gap decision theory, which allows deriving robust decisions with respect to price volatility. Risk aversion is built implicitly within the proposed model. Correlations among prices in the day-ahead and the adjustment markets are properly modeled. The proposed technique is illustrated through a realistic case study. (author)

  6. The Effect of Wealth Shocks on Loss Aversion: Behavior and Neural Correlates

    Directory of Open Access Journals (Sweden)

    V. S. Chandrasekhar Pammi

    2017-04-01

    Full Text Available Kahneman and Tversky (1979 first demonstrated that when individuals decide whether or not to accept a gamble, potential losses receive more weight than possible gains in the decision. This phenomenon is referred to as loss aversion. We investigated how loss aversion in risky financial decisions is influenced by sudden changes to wealth, employing both behavioral and neurobiological measures. We implemented an fMRI experimental paradigm, based on that employed by Tom et al. (2007. There are two treatments, called RANDOM and CONTINGENT. In RANDOM, the baseline setting, the changes to wealth, referred to as wealth shocks in economics, are independent of the actual choices participants make. Under CONTINGENT, we induce the belief that the changes in income are a consequence of subjects' own decisions. The magnitudes and sequence of the shocks to wealth are identical between the CONTINGENT and RANDOM treatments. We investigated whether more loss aversion existed in one treatment than another. The behavioral results showed significantly greater loss aversion in CONTINGENT compared to RANDOM after a negative wealth shock. No differences were observed in the response to positive shocks. The fMRI results revealed a neural loss aversion network, comprising the bilateral striatum, amygdala and dorsal anterior cingulate cortex that was common to the CONTINGENT and RANDOM tasks. However, the ventral prefrontal cortex, primary somatosensory cortex and superior occipital cortex, showed greater activation in response to a negative change in wealth due to individual's own decisions than when the change was exogenous. These results indicate that striatum activation correlates with loss aversion independently of the source of the shock, and that the ventral prefrontal cortex (vPFC codes the experimental manipulation of agency in one's actions influencing loss aversion.

  7. The Effect of Wealth Shocks on Loss Aversion: Behavior and Neural Correlates.

    Science.gov (United States)

    Pammi, V S Chandrasekhar; Ruiz, Sergio; Lee, Sangkyun; Noussair, Charles N; Sitaram, Ranganatha

    2017-01-01

    Kahneman and Tversky (1979) first demonstrated that when individuals decide whether or not to accept a gamble, potential losses receive more weight than possible gains in the decision. This phenomenon is referred to as loss aversion. We investigated how loss aversion in risky financial decisions is influenced by sudden changes to wealth, employing both behavioral and neurobiological measures. We implemented an fMRI experimental paradigm, based on that employed by Tom et al. (2007). There are two treatments, called RANDOM and CONTINGENT. In RANDOM, the baseline setting, the changes to wealth, referred to as wealth shocks in economics, are independent of the actual choices participants make. Under CONTINGENT, we induce the belief that the changes in income are a consequence of subjects' own decisions. The magnitudes and sequence of the shocks to wealth are identical between the CONTINGENT and RANDOM treatments. We investigated whether more loss aversion existed in one treatment than another. The behavioral results showed significantly greater loss aversion in CONTINGENT compared to RANDOM after a negative wealth shock. No differences were observed in the response to positive shocks. The fMRI results revealed a neural loss aversion network, comprising the bilateral striatum, amygdala and dorsal anterior cingulate cortex that was common to the CONTINGENT and RANDOM tasks. However, the ventral prefrontal cortex, primary somatosensory cortex and superior occipital cortex, showed greater activation in response to a negative change in wealth due to individual's own decisions than when the change was exogenous. These results indicate that striatum activation correlates with loss aversion independently of the source of the shock, and that the ventral prefrontal cortex (vPFC) codes the experimental manipulation of agency in one's actions influencing loss aversion.

  8. Sensitivity of the brain to loss aversion during risky gambles.

    Science.gov (United States)

    Dreher, Jean-Claude

    2007-07-01

    Little is known about the neural systems that subserve human loss aversion. A recent neuroimaging study by Tom, Poldrack and colleagues reports that this pattern of behaviour is directly tied to the greater sensitivity of the brain to potential losses compared with potential gains and uncovers a brain network whose activity increases with potential gains and decreases with potential losses. These results challenge the common view that loss aversion engages a distinct emotion-related brain network (e.g. amygdala and insula).

  9. Loss Aversion Reflects Information Accumulation, Not Bias: A Drift-Diffusion Model Study

    Directory of Open Access Journals (Sweden)

    Summer N. Clay

    2017-10-01

    Full Text Available Defined as increased sensitivity to losses, loss aversion is often conceptualized as a cognitive bias. However, findings that loss aversion has an attentional or emotional regulation component suggest that it may instead reflect differences in information processing. To distinguish these alternatives, we applied the drift-diffusion model (DDM to choice and response time (RT data in a card gambling task with unknown risk distributions. Loss aversion was measured separately for each participant. Dividing the participants into terciles based on loss aversion estimates, we found that the most loss-averse group showed a significantly lower drift rate than the other two groups, indicating overall slower uptake of information. In contrast, neither the starting bias nor the threshold separation (barrier varied by group, suggesting that decision thresholds are not affected by loss aversion. These results shed new light on the cognitive mechanisms underlying loss aversion, consistent with an account based on information accumulation.

  10. Aversion to ambiguity and willingness to take risks affect therapeutic decisions in managing atrial fibrillation for stroke prevention: results of a pilot study in family physicians.

    Science.gov (United States)

    Raptis, Stavroula; Chen, Jia Ning; Saposnik, Florencia; Pelyavskyy, Roman; Liuni, Andrew; Saposnik, Gustavo

    2017-01-01

    Anticoagulation is the therapeutic paradigm for stroke prevention in patients with atrial fibrillation (AF). It is unknown how physicians make treatment decisions in primary stroke prevention for patients with AF. To evaluate the association between family physicians' risk preferences (aversion risk and ambiguity) and therapeutic recommendations (anticoagulation) in the management of AF for primary stroke prevention by applying concepts from behavioral economics. Overall, 73 family physicians participated and completed the study. Our study comprised seven simulated case vignettes, three behavioral experiments, and two validated surveys. Behavioral experiments and surveys incorporated an economic framework to determine risk preferences and biases (e.g., ambiguity aversion, willingness to take risks). The primary outcome was making the correct decision of anticoagulation therapy. Secondary outcomes included medical errors in the management of AF for stroke prevention. Overall, 23.3% (17/73) of the family physicians elected not to escalate the therapy from antiplatelets to anticoagulation when recommended by best practice guidelines. A total of 67.1% of physicians selected the correct therapeutic options in two or more of the three simulated case vignettes. Multivariate analysis showed that aversion to ambiguity was associated with appropriate change to anticoagulation therapy in the management of AF (OR 5.48, 95% CI 1.08-27.85). Physicians' willingness to take individual risk in multiple domains was associated with lower errors (OR 0.16, 95% CI 0.03-0.86). Physicians' aversion to ambiguity and willingness to take risks are associated with appropriate therapeutic decisions in the management of AF for primary stroke prevention. Further large scale studies are needed.

  11. Impact of perennial energy crops income variability on the crop selection of risk averse farmers

    International Nuclear Information System (INIS)

    Alexander, Peter; Moran, Dominic

    2013-01-01

    The UK Government policy is for the area of perennial energy crops in the UK to expand significantly. Farmers need to choose these crops in preference to conventional rotations for this to be achievable. This paper looks at the potential level and variability of perennial energy crop incomes and the relation to incomes from conventional arable crops. Assuming energy crop prices are correlated to oil prices the results suggests that incomes from them are not well correlated to conventional arable crop incomes. A farm scale mathematical programming model is then used to attempt to understand the affect on risk averse farmers crop selection. The inclusion of risk reduces the energy crop price required for the selection of these crops. However yields towards the highest of those predicted in the UK are still required to make them an optimal choice, suggesting only a small area of energy crops within the UK would be expected to be chosen to be grown. This must be regarded as a tentative conclusion, primarily due to high sensitivity found to crop yields, resulting in the proposal for further work to apply the model using spatially disaggregated data. - Highlights: ► Energy crop and conventional crop incomes suggested as uncorrelated. ► Diversification effect of energy crops investigated for a risk averse farmer. ► Energy crops indicated as optimal selection only on highest yielding UK sites. ► Large establishment grant rates to substantially alter crop selections.

  12. Loss Aversion and Individual Characteristics

    DEFF Research Database (Denmark)

    Hjorth, Katrine; Fosgerau, Mogens

    2011-01-01

    Many studies have shown that loss aversion affects the valuation of non-market goods. Using stated choice data, this paper presents an empirical investigation of how individual-level loss aversion varies with observable personal characteristics and with the choice context. We investigate loss...... aversion with respect to travel time and money, and find significant loss aversion in both dimensions. The degree of loss aversion in the time dimension is larger than in the money dimension, and depends on age and education. Subjects tend to be more loss averse when the reference is well established....

  13. Eliciting and Measuring Betrayal Aversion using the BDM Mechanism*

    Science.gov (United States)

    Quercia, Simone

    2016-01-01

    Betrayal aversion has been operationalized as the evidence that subjects demand a higher risk premium to take social risks compared to natural risks. This evidence has been first shown by Bohnet and Zeckhauser (2004) using an adaptation of the Becker – DeGroot – Marschak mechanism (BDM, Becker et al. (1964)). We compare their implementation of the BDM mechanism with a new version designed to facilitate subjects’ comprehension. We find that, although the two versions produce different distributions of values, the size of betrayal aversion, measured as an average treatment difference between social and natural risk settings, is not different across the two versions. We further show that our implementation is preferable to use in practice as it reduces substantially subjects’ mistakes and the likelihood of noisy valuations. PMID:27366658

  14. Strategic and Tactical Design of Competing Decentralized Supply Chain Networks with Risk-Averse Participants for Markets with Uncertain Demand

    Directory of Open Access Journals (Sweden)

    Ashkan Hafezalkotob

    2011-01-01

    Full Text Available An integrated equilibrium model for tactical decisions in network design is developed. We consider a decentralized supply chain network operating in markets under uncertain demands when there is a rival decentralized chain. The primary assumption is that two chains provide partial substitutable products to the markets, and markets' demands are affected by tactical decisions such as price, service level, and advertising expenditure. Each chain consists of one risk-averse manufacturer and a set of risk-averse retailers. The strategic decisions are frequently taking precedence over tactical ones. Therefore, we first find equilibrium of tactical decisions for each possible scenario of supply chain network. Afterwards, we find optimal distribution network of the new supply chain by the scenario evaluation method. Numerical example, including sensitivity analysis will illustrate how the conservative behaviors of chains' members affect expected demand, profit, and utility of each distribution scenario.

  15. Determinants of propranolol’s selective effect on loss aversion

    Science.gov (United States)

    Sokol-Hessner, Peter; Lackovic, Sandra F.; Tobe, Russell H.; Camerer, Colin F.; Leventhal, Bennett L.; Phelps, Elizabeth A.

    2015-01-01

    Research on emotion and decision-making has suggested that arousal mediates risky decisions (e.g., Bechara et al., 1997), but several distinct and often confounded processes drive such choices. Here, we used econometric modeling to separate and quantify the unique contributions of loss aversion, risk sensitivity and choice consistency to risky decision-making. We administered the beta-blocker propranolol in a double-blind, placebo-controlled within-subjects study, targeting the neurohormonal basis of physiological arousal. Matching our intervention’s pharmacological specificity with a quantitative model delineating decision-making components allowed us to identify the causal relationships between arousal and decision-making that do and do not exist. Propranolol selectively reduced loss aversion in a baseline- and dose-dependent manner (i.e. as a function of initial loss aversion and body-mass index), and did not affect risk sensitivity or choice consistency. These findings provide evidence for a specific, modulatory, and causal relationship between precise components of both emotion and risky decision-making. PMID:26063441

  16. Decision-Making in Suicidal Behavior: The Protective Role of Loss Aversion.

    Science.gov (United States)

    Hadlaczky, Gergö; Hökby, Sebastian; Mkrtchian, Anahit; Wasserman, Danuta; Balazs, Judit; Machín, Núria; Sarchiapone, Marco; Sisask, Merike; Carli, Vladimir

    2018-01-01

    Loss aversion is a central and well operationalized trait behavior that describes the tendency for humans to strongly prefer avoiding losses to making equivalent gains. Human decision-making is thus biased toward safer choices. The aim of this study was to explore the relationship between loss aversion and suicidal behavior in a large cohort of adolescents recruited in 30 schools of seven European countries for a longitudinal study (Current Controlled Trials ISRCTN65120704). We hypothesized that individuals with higher loss aversion would be less likely to attempt suicide. A mixed monetary gamble task was used to generate loss aversion scores for each participant. Logistic regression was used to estimate the cross-sectional association between loss aversion and life-time suicide attempts in the baseline sample ( N  = 2,158; 156 attempters), and incident attempts were predicted in a 4-month prospective model ( N  = 1,763; 75 attempters). Multiple regression was used to estimate the association between loss aversion and suicidal ideation. Loss aversion was a significant predictor of attempted suicide in both the cross-sectional (OR = 0.79; P  = 0.005) and prospective analysis (OR = 0.81; P  = 0.040), adjusting for depression, anxiety, stress, and sex. The correlation between pre and post measures of loss aversion was r  = 0.52 ( P  loss aversion was not (cross-sectional model: P  = 0.092; Prospective model: P  = 0.390). This suggests that the concept of loss aversion may be useful in understanding the transition from suicidal thoughts to attempts. This and previous studies suggest that altered decision-making is involved in suicide attempts. In our study, we show the involvement of loss aversion in particular, and propose that individuals high in loss aversion are discouraged from carrying out the suicide attempt because of a greater focus on the negative consequences of the decision.

  17. PERFORMANCE EVALUATION AND RISK AVERSION RATE FOR SEVERAL STOCK INDICES IN INDONESIA STOCK EXCHANGE

    OpenAIRE

    Robiyanto Robiyanto

    2017-01-01

    There are numerous stock indices in Indonesia Stock Exchange. Several of them are LQ-45, MBX, DBX, JII, SRI-KEHATI, PEFINDO-25, BISNIS-27, IDX-30 and KOMPAS-100. Unfortunately there are limi­ted researches which have been done to measure those indices performance specifically. The same condition also occurs on risk aversion level usage in Indonesia Stock Exchange, only few numbers of researches use this me­a­surement in the portfolio valuation. Based on that, this research measured the perfor...

  18. Understanding Loan Aversion in Education

    Directory of Open Access Journals (Sweden)

    Angela Boatman

    2017-01-01

    Full Text Available Although prior research has suggested that some students may be averse to taking out loans to finance their college education, there is little empirical evidence showing the extent to which loan aversion exists or how it affects different populations of students. This study provides the first large-scale quantitative evidence of levels of loan aversion in the United States. Using survey data collected on more than 6,000 individuals, we examine the frequency of loan aversion in three distinct populations. Depending on the measure, between 20 and 40% of high school seniors exhibit loan aversion with lower rates among community college students and adults not in college. Women are less likely to express loan-averse attitudes than men, and Hispanic respondents are more likely to be loan averse than White respondents.

  19. Size doesn't really matter: ambiguity aversion in Ellsberg urns with few balls.

    Science.gov (United States)

    Pulford, Briony D; Colman, Andrew M

    2008-01-01

    When attempting to draw a ball of a specified color either from an urn containing 50 red balls and 50 black balls or from an urn containing an unknown ratio of 100 red and black balls, a majority of decision makers prefer the known-risk urn, and this ambiguity aversion effect violates expected utility theory. In an experimental investigation of the effect of urn size on ambiguity aversion, 149 participants showed similar levels of aversion when choosing from urns containing 2, 10, or 100 balls. The occurrence of a substantial and significant ambiguity aversion effect even in the smallest urn suggests that influential theoretical interpretations of ambiguity aversion may need to be reconsidered.

  20. On Loss Aversion, Level-1 Reasoning, and Betting

    DEFF Research Database (Denmark)

    Erev, Ido; Gilat-Yihyie, Sharon; Marchiori, Davide

    2014-01-01

    Previous research suggests that human reaction to risky opportunities reflects two contradicting biases: “loss aversion”, and “limited level of reasoning” that leads to overconfidence. Rejection of attractive gambles is explained by loss aversion, while counterproductive risk seeking is attributed...... to limited level of reasoning. The current research highlights a shortcoming of this popular (but often implicit) “contradicting biases” assertion. Studies of “negative-sum betting games” reveal high rate of counterproductive betting even when limited level of reasoning and loss aversion imply no betting...

  1. Reporting individual surgeon outcomes does not lead to risk aversion in abdominal aortic aneurysm surgery.

    Science.gov (United States)

    Saratzis, A; Thatcher, A; Bath, M F; Sidloff, D A; Bown, M J; Shakespeare, J; Sayers, R D; Imray, C

    2017-02-01

    INTRODUCTION Reporting surgeons' outcomes has recently been introduced in the UK. This has the potential to result in surgeons becoming risk averse. The aim of this study was to investigate whether reporting outcomes for abdominal aortic aneurysm (AAA) surgery impacts on the number and risk profile (level of fitness) of patients offered elective treatment. METHODS Publically available National Vascular Registry data were used to compare the number of AAAs treated in those centres across the UK that reported outcomes for the periods 2008-2012, 2009-2013 and 2010-2014. Furthermore, the number and characteristics of patients referred for consideration of elective AAA repair at a single tertiary unit were analysed yearly between 2010 and 2014. Clinic, casualty and theatre event codes were searched to obtain all AAAs treated. The results of cardiopulmonary exercise testing (CPET) were assessed. RESULTS For the 85 centres that reported outcomes in all three five-year periods, the median number of AAAs treated per unit increased between the periods 2008-2012 and 2010-2014 from 192 to 214 per year (p=0.006). In the single centre cohort study, the proportion of patients offered elective AAA repair increased from 74% in 2009-2010 to 81% in 2013-2014, with a maximum of 84% in 2012-2013. The age, aneurysm size and CPET results (anaerobic threshold levels) for those eventually offered elective treatment did not differ significantly between 2010 and 2014. CONCLUSIONS The results do not support the assumption that reporting individual surgeon outcomes is associated with a risk averse strategy regarding patient selection in aneurysm surgery at present.

  2. Are ambiguity aversion and ambiguity intolerance identical? A neuroeconomics investigation.

    Science.gov (United States)

    Tanaka, Yusuke; Fujino, Junya; Ideno, Takashi; Okubo, Shigetaka; Takemura, Kazuhisa; Miyata, Jun; Kawada, Ryosaku; Fujimoto, Shinsuke; Kubota, Manabu; Sasamoto, Akihiko; Hirose, Kimito; Takeuchi, Hideaki; Fukuyama, Hidenao; Murai, Toshiya; Takahashi, Hidehiko

    2014-01-01

    In recent years, there has been growing interest in understanding a person's reaction to ambiguous situations, and two similar constructs related to ambiguity, "ambiguity aversion" and "ambiguity intolerance," are defined in different disciplines. In the field of economic decision-making research, "ambiguity aversion" represents a preference for known risks relative to unknown risks. On the other hand, in clinical psychology, "ambiguity intolerance" describes the tendency to perceive ambiguous situations as undesirable. However, it remains unclear whether these two notions derived from different disciplines are identical or not. To clarify this issue, we combined an economic task, psychological questionnaires, and voxel-based morphometry (VBM) of structural brain magnetic resonance imaging (MRI) in a sample of healthy volunteers. The individual ambiguity aversion tendency parameter, as measured by our economic task, was negatively correlated with agreeableness scores on the self-reported version of the Revised NEO Personality Inventory. However, it was not correlated with scores of discomfort with ambiguity, one of the subscales of the Need for Closure Scale. Furthermore, the ambiguity aversion tendency parameter was negatively correlated with gray matter (GM) volume of areas in the lateral prefrontal cortex and parietal cortex, whereas ambiguity intolerance was not correlated with GM volume in any region. Our results suggest that ambiguity aversion, described in decision theory, may not necessarily be identical to ambiguity intolerance, referred to in clinical psychology. Cautious applications of decision theory to clinical neuropsychiatry are recommended.

  3. Decision on risk-averse dual-channel supply chain under demand disruption

    Science.gov (United States)

    Yan, Bo; Jin, Zijie; Liu, Yanping; Yang, Jianbo

    2018-02-01

    We studied dual-channel supply chains using centralized and decentralized decision-making models. We also conducted a comparative analysis of the decisions before and after demand disruption. The study shows that the amount of change in decision-making is a linear function of the amount of demand disruption, and it is independent of the risk-averse coefficient. The optimal sales volume decision of the disturbing supply chain is related to market share and demand disruption in the decentralized decision-making model. The optimal decision is only influenced by demand disruption in the centralized decision-making model. The stability of the sales volume of the two models is related to market share and demand disruption. The optimal system production of the two models shows robustness, but their stable internals are different.

  4. Personal finance and life insurance under separation of risk aversion and elasticity of substitution

    DEFF Research Database (Denmark)

    Jensen, Ninna Reitzel; Steffensen, Mogens

    2015-01-01

    aversion from elasticity of inter-temporal substitution, we introduce certainty equivalents. We propose a time-inconsistent global optimization problem, and we present a verification theorem for an equilibrium control. In the special case without mortality risk, we discover that our optimization approach...... is equivalent to recursive utility optimization with Epstein–Zin preferences in the sense that the two approaches lead to the same result. We find this interesting since our optimization problem has an intuitive interpretation as a global maximization of certainty equivalents and since recursive utility......, in contrast to our approach, gives rise to severe differentiability problems. Also, our optimization approach can there be seen as a generalization of recursive utility optimization with Epstein–Zin preferences to include mortality risk and life insurance....

  5. Imagery Rescripting: The Impact of Conceptual and Perceptual Changes on Aversive Autobiographical Memories.

    Directory of Open Access Journals (Sweden)

    Christien Slofstra

    Full Text Available Imagery rescripting (ImRs is a process by which aversive autobiographical memories are rendered less unpleasant or emotional. ImRs is thought only to be effective if a change in the meaning-relevant (semantic content of the mental image is produced, according to a cognitive hypothesis of ImRs. We propose an additional hypothesis: that ImRs can also be effective by the manipulation of perceptual features of the memory, without explicitly targeting meaning-relevant content.In two experiments using a within-subjects design (both N = 48, community samples, both Conceptual-ImRs-focusing on changing meaning-relevant content-and Perceptual-ImRs-focusing on changing perceptual features-were compared to Recall-only of aversive autobiographical image-based memories. An active control condition, Recall + Attentional Breathing (Recall+AB was added in the first experiment. In the second experiment, a Positive-ImRs condition was added-changing the aversive image into a positive image that was unrelated to the aversive autobiographical memory. Effects on the aversive memory's unpleasantness, vividness and emotionality were investigated.In Experiment 1, compared to Recall-only, both Conceptual-ImRs and Perceptual-ImRs led to greater decreases in unpleasantness, and Perceptual-ImRs led to greater decreases in emotionality of memories. In Experiment 2, the effects on unpleasantness were not replicated, and both Conceptual-ImRs and Perceptual-ImRs led to greater decreases in emotionality, compared to Recall-only, as did Positive-ImRs. There were no effects on vividness, and the ImRs conditions did not differ significantly from Recall+AB.Results suggest that, in addition to traditional forms of ImRs, targeting the meaning-relevant content of an image during ImRs, relatively simple techniques focusing on perceptual aspects or positive imagery might also yield benefits. Findings require replication and extension to clinical samples.

  6. Imagery Rescripting: The Impact of Conceptual and Perceptual Changes on Aversive Autobiographical Memories.

    Science.gov (United States)

    Slofstra, Christien; Nauta, Maaike H; Holmes, Emily A; Bockting, Claudi L H

    2016-01-01

    Imagery rescripting (ImRs) is a process by which aversive autobiographical memories are rendered less unpleasant or emotional. ImRs is thought only to be effective if a change in the meaning-relevant (semantic) content of the mental image is produced, according to a cognitive hypothesis of ImRs. We propose an additional hypothesis: that ImRs can also be effective by the manipulation of perceptual features of the memory, without explicitly targeting meaning-relevant content. In two experiments using a within-subjects design (both N = 48, community samples), both Conceptual-ImRs-focusing on changing meaning-relevant content-and Perceptual-ImRs-focusing on changing perceptual features-were compared to Recall-only of aversive autobiographical image-based memories. An active control condition, Recall + Attentional Breathing (Recall+AB) was added in the first experiment. In the second experiment, a Positive-ImRs condition was added-changing the aversive image into a positive image that was unrelated to the aversive autobiographical memory. Effects on the aversive memory's unpleasantness, vividness and emotionality were investigated. In Experiment 1, compared to Recall-only, both Conceptual-ImRs and Perceptual-ImRs led to greater decreases in unpleasantness, and Perceptual-ImRs led to greater decreases in emotionality of memories. In Experiment 2, the effects on unpleasantness were not replicated, and both Conceptual-ImRs and Perceptual-ImRs led to greater decreases in emotionality, compared to Recall-only, as did Positive-ImRs. There were no effects on vividness, and the ImRs conditions did not differ significantly from Recall+AB. Results suggest that, in addition to traditional forms of ImRs, targeting the meaning-relevant content of an image during ImRs, relatively simple techniques focusing on perceptual aspects or positive imagery might also yield benefits. Findings require replication and extension to clinical samples.

  7. Gender differences in sleep deprivation effects on risk and inequality aversion: evidence from an economic experiment.

    Science.gov (United States)

    Ferrara, Michele; Bottasso, Anna; Tempesta, Daniela; Carrieri, Marika; De Gennaro, Luigi; Ponti, Giovanni

    2015-01-01

    Excessive working hours--even at night--are becoming increasingly common in our modern 24/7 society. The prefrontal cortex (PFC) is particularly vulnerable to the effects of sleep loss and, consequently, the specific behaviors subserved by the functional integrity of the PFC, such as risk-taking and pro-social behavior, may be affected significantly. This paper seeks to assess the effects of one night of sleep deprivation on subjects' risk and social preferences, which are probably the most explored behavioral domains in the tradition of Experimental Economics. This novel cross-over study employs thirty-two university students (gender-balanced) participating to 2 counterbalanced laboratory sessions in which they perform standard risk and social preference elicitation protocols. One session was after one night of undisturbed sleep at home, and the other was after one night of sleep deprivation in the laboratory. Sleep deprivation causes increased sleepiness and decreased alertness in all subjects. After sleep loss males make riskier decisions compared to the rested condition, while females do the opposite. Females likewise show decreased inequity aversion after sleep deprivation. As for the relationship between cognitive ability and economic decisions, sleep deprived individuals with higher cognitive reflection show lower risk aversion and more altruistic behavior. These results show that one night of sleep deprivation alters economic behavior in a gender-sensitive way. Females' reaction to sleep deprivation, characterized by reduced risky choices and increased egoism compared to males, may be related to intrinsic psychological gender differences, such as in the way men and women weigh up probabilities in their decision-making, and/or to the different neurofunctional substrate of their decision-making.

  8. Gender Differences in Sleep Deprivation Effects on Risk and Inequality Aversion: Evidence from an Economic Experiment

    Science.gov (United States)

    Ferrara, Michele; Bottasso, Anna; Tempesta, Daniela; Carrieri, Marika; De Gennaro, Luigi; Ponti, Giovanni

    2015-01-01

    Excessive working hours—even at night—are becoming increasingly common in our modern 24/7 society. The prefrontal cortex (PFC) is particularly vulnerable to the effects of sleep loss and, consequently, the specific behaviors subserved by the functional integrity of the PFC, such as risk-taking and pro-social behavior, may be affected significantly. This paper seeks to assess the effects of one night of sleep deprivation on subjects’ risk and social preferences, which are probably the most explored behavioral domains in the tradition of Experimental Economics. This novel cross-over study employs thirty-two university students (gender-balanced) participating to 2 counterbalanced laboratory sessions in which they perform standard risk and social preference elicitation protocols. One session was after one night of undisturbed sleep at home, and the other was after one night of sleep deprivation in the laboratory. Sleep deprivation causes increased sleepiness and decreased alertness in all subjects. After sleep loss males make riskier decisions compared to the rested condition, while females do the opposite. Females likewise show decreased inequity aversion after sleep deprivation. As for the relationship between cognitive ability and economic decisions, sleep deprived individuals with higher cognitive reflection show lower risk aversion and more altruistic behavior. These results show that one night of sleep deprivation alters economic behavior in a gender-sensitive way. Females’ reaction to sleep deprivation, characterized by reduced risky choices and increased egoism compared to males, may be related to intrinsic psychological gender differences, such as in the way men and women weigh up probabilities in their decision-making, and/or to the different neurofunctional substrate of their decision-making. PMID:25793869

  9. Gender differences in sleep deprivation effects on risk and inequality aversion: evidence from an economic experiment.

    Directory of Open Access Journals (Sweden)

    Michele Ferrara

    Full Text Available Excessive working hours--even at night--are becoming increasingly common in our modern 24/7 society. The prefrontal cortex (PFC is particularly vulnerable to the effects of sleep loss and, consequently, the specific behaviors subserved by the functional integrity of the PFC, such as risk-taking and pro-social behavior, may be affected significantly. This paper seeks to assess the effects of one night of sleep deprivation on subjects' risk and social preferences, which are probably the most explored behavioral domains in the tradition of Experimental Economics. This novel cross-over study employs thirty-two university students (gender-balanced participating to 2 counterbalanced laboratory sessions in which they perform standard risk and social preference elicitation protocols. One session was after one night of undisturbed sleep at home, and the other was after one night of sleep deprivation in the laboratory. Sleep deprivation causes increased sleepiness and decreased alertness in all subjects. After sleep loss males make riskier decisions compared to the rested condition, while females do the opposite. Females likewise show decreased inequity aversion after sleep deprivation. As for the relationship between cognitive ability and economic decisions, sleep deprived individuals with higher cognitive reflection show lower risk aversion and more altruistic behavior. These results show that one night of sleep deprivation alters economic behavior in a gender-sensitive way. Females' reaction to sleep deprivation, characterized by reduced risky choices and increased egoism compared to males, may be related to intrinsic psychological gender differences, such as in the way men and women weigh up probabilities in their decision-making, and/or to the different neurofunctional substrate of their decision-making.

  10. The effects of nicotine on ethanol-induced conditioned taste aversions in Long-Evans rats.

    Science.gov (United States)

    Rinker, Jennifer A; Busse, Gregory D; Roma, Peter G; Chen, Scott A; Barr, Christina S; Riley, Anthony L

    2008-04-01

    Overall drug acceptability is thought to be a function of the balance between its rewarding and aversive effects, the latter of which is reportedly affected by polydrug use. Given that nicotine and alcohol are commonly co-used, the present experiments sought to assess nicotine's impact on ethanol's aversive effects within a conditioned taste aversion design. Experiment 1 examined various doses of nicotine (0, 0.4, 0.8, 1.2 mg/kg) to determine a behaviorally active dose, and experiment 2 examined various doses of ethanol (0, 0.5, 1.0, 1.5 g/kg) to determine a dose that produced intermediate aversions. Experiment 3 then examined the aversive effects of nicotine (0.8 mg/kg) and ethanol (1.0 g/kg) alone and in combination. Additionally, nicotine's effects on blood alcohol concentrations (BAC) and ethanol-induced hypothermia were examined. Nicotine and ethanol combined produced aversions significantly greater than those produced by either drug alone or the summed aversive effects of the individual compounds. These effects were unrelated to changes in BAC, but nicotine and ethanol combined produced a prolonged hypothermic effect which may contribute to the increased aversions induced by the combination. These data demonstrate that nicotine may interact with ethanol, increasing ethanol's aversive effects. Although the rewarding effects of concurrently administered nicotine and ethanol were not assessed, these data do indicate that the reported high incidence of nicotine and ethanol co-use is unlikely due to reductions in the aversiveness of ethanol with concurrently administered nicotine. It is more likely attributable to nicotine-related changes in ethanol's rewarding effects.

  11. Frontal, Striatal, and Medial Temporal Sensitivity to Value Distinguishes Risk-Taking from Risk-Aversive Older Adults during Decision Making.

    Science.gov (United States)

    Goh, Joshua O S; Su, Yu-Shiang; Tang, Yong-Jheng; McCarrey, Anna C; Tereshchenko, Alexander; Elkins, Wendy; Resnick, Susan M

    2016-12-07

    Aging compromises the frontal, striatal, and medial temporal areas of the reward system, impeding accurate value representation and feedback processing critical for decision making. However, substantial variability characterizes age-related effects on the brain so that some older individuals evince clear neurocognitive declines whereas others are spared. Moreover, the functional correlates of normative individual differences in older-adult value-based decision making remain unclear. We performed a functional magnetic resonance imaging study in 173 human older adults during a lottery choice task in which costly to more desirable stakes were depicted using low to high expected values (EVs) of points. Across trials that varied in EVs, participants decided to accept or decline the offered stakes to maximize total accumulated points. We found that greater age was associated with less optimal decisions, accepting stakes when losses were likely and declining stakes when gains were likely, and was associated with increased frontal activity for costlier stakes. Critically, risk preferences varied substantially across older adults and neural sensitivity to EVs in the frontal, striatal, and medial temporal areas dissociated risk-aversive from risk-taking individuals. Specifically, risk-averters increased neural responses to increasing EVs as stakes became more desirable, whereas risk-takers increased neural responses with decreasing EV as stakes became more costly. Risk preference also modulated striatal responses during feedback with risk-takers showing more positive responses to gains compared with risk-averters. Our findings highlight the frontal, striatal, and medial temporal areas as key neural loci in which individual differences differentially affect value-based decision-making ability in older adults. Frontal, striatal, and medial temporal functions implicated in value-based decision processing of rewards and costs undergo substantial age-related changes. However, age

  12. Noxious facility impact projection: Incorporating the effects of risk aversion

    International Nuclear Information System (INIS)

    Nieves, L.A.

    1993-01-01

    Developing new sites for noxious facilities has become a complex process with many potential pitfalls. In addition to the need to negotiate conditions acceptable to the host community, siting success may depend on the facility proposer's ability to identify a candidate site that not only meets technical requirements, but that is located in a community or region whose population is not highly averse to the risks associated with the type of facility being proposed. Success may also depend on the proposer accurately assessing potential impacts of the facility and offering an equitable compensation package to the people affected by it. Facility impact assessments, as typically performed, include only the effects of changes in population, employment and economic activity associated with facility construction and operation. Because of their scope, such assessments usually show a short-run, net economic benefit for the host region, making the intensely negative public reaction to some types and locations of facilities seem unreasonable. The impact component excluded from these assessments is the long-run economic effect of public perceptions of facility risk and nuisance characteristics. Recent developments in psychological and economic measurement techniques have opened the possibility of correcting this flaw by incorporating public perceptions in projections of economic impacts from noxious facilities

  13. The ontogeny of ethanol aversion.

    Science.gov (United States)

    Saalfield, Jessica; Spear, Linda

    2016-03-15

    Recent work has suggested separate developmental periods within the broader framework of adolescence, with data suggesting distinct alterations and vulnerabilities within these intervals. While previous research has suggested reduced sensitivity to the aversive effects of alcohol in adolescence relative to adults, a more detailed ontogeny of this effect has yet to be conducted. The adolescent brain undergoes significant transitions throughout adolescence, including in regions linked with drug reward and aversion. The current study aimed to determine the ontogeny of ethanol aversion by utilizing a conditioned taste aversion procedure at six different ages to test the hypothesis that the transitions into, through, and out of adolescence are associated with ontogenetic alterations in sensitivity to the aversive properties of ethanol. Non-deprived animals given Boost® as the conditioned stimulus (CS) were used in Experiment 1, whereas Experiment 2 used water-restricted animals provided with a saccharin/sucrose solution as the CS. In both experiments, an attenuated sensitivity to the aversive properties of ethanol was evident in adolescents compared to adults, although more age differences were apparent in water deprived animals than when a highly palatable CS was given to ad libitum animals. Overall, the data suggest an attenuated sensitivity to the aversive properties of ethanol that is most pronounced during pre- and early adolescence, declining thereafter to reach the enhanced aversive sensitivity of adults. Copyright © 2016 Elsevier Inc. All rights reserved.

  14. Loss aversion in schizophrenia.

    Science.gov (United States)

    Trémeau, Fabien; Brady, Melissa; Saccente, Erica; Moreno, Alexis; Epstein, Henry; Citrome, Leslie; Malaspina, Dolores; Javitt, Daniel

    2008-08-01

    Loss aversion in decision-making refers to a higher sensitivity to losses than to gains. Loss aversion is conceived as an affective interference in cognitive processes such as judgment and decision-making. Loss aversion in non-risky choices has not been studied in schizophrenia. Forty-two individuals with schizophrenia and 42 non-patient control subjects, matched by gender and age, were randomized to two different scenarios (a buying scenario and a selling scenario). Subjects were asked to evaluate the price of a decorated mug. Schizophrenia subjects were re-tested four weeks later with the other scenario. Contrary to non-patient controls, schizophrenia subjects did not show loss aversion. In the schizophrenia group, absence of loss aversion was correlated with age, duration of illness, number of months in State hospitals, and poorer performance in the Wisconsin Card Sorting Test, but not with current psychopathology and two domains of emotional experience. Absence of loss aversion in schizophrenia represents a deficit in the processing of emotional information during decision-making. It can be interpreted as a lack of integration between the emotional and the cognitive systems, or to a more diffuse and de-differentiated impact of emotional information on decision-making. Future studies should bring more clarity to this question.

  15. Transcranial direct current stimulation over prefrontal cortex diminishes degree of risk aversion.

    Science.gov (United States)

    Ye, Hang; Chen, Shu; Huang, Daqiang; Wang, Siqi; Jia, Yongmin; Luo, Jun

    2015-06-26

    Previous studies have established that transcranial direct current stimulation (tDCS) is a powerful technique for manipulating the activity of the human cerebral cortex. Many studies have found that weighing the risks and benefits in decision-making involves a complex neural network that includes the dorsolateral prefrontal cortex (DLPFC). We studied whether participants change the balance of risky and safe responses after receiving tDCS applied over the right and left prefrontal cortex. A total of 60 healthy volunteers performed a risk task while they received either anodal tDCS over the right prefrontal cortex, with cathodal over the left; anodal tDCS over the left prefrontal cortex, with cathodal over the right; or sham stimulation. The participants tended to choose less risky options after receiving sham stimulation, demonstrating that the task might be highly influenced by the "wealth effect". There was no statistically significant change after either right anodal/left cathodal or left anodal/right cathodal tDCS, indicating that both types of tDCS impact the participants' degrees of risk aversion, and therefore, counteract the wealth effect. We also found gender differences in the participants' choices. These findings extend the notion that DLPFC activity is critical for risk decision-making. Application of tDCS to the right/left DLPFC may impact a person's attitude to taking risks. Copyright © 2015 Elsevier Ireland Ltd. All rights reserved.

  16. Lossed in translation: an off-the-shelf method to recover probabilistic beliefs from loss-averse agents.

    Science.gov (United States)

    Offerman, Theo; Palley, Asa B

    2016-01-01

    Strictly proper scoring rules are designed to truthfully elicit subjective probabilistic beliefs from risk neutral agents. Previous experimental studies have identified two problems with this method: (i) risk aversion causes agents to bias their reports toward the probability of [Formula: see text], and (ii) for moderate beliefs agents simply report [Formula: see text]. Applying a prospect theory model of risk preferences, we show that loss aversion can explain both of these behavioral phenomena. Using the insights of this model, we develop a simple off-the-shelf probability assessment mechanism that encourages loss-averse agents to report true beliefs. In an experiment, we demonstrate the effectiveness of this modification in both eliminating uninformative reports and eliciting true probabilistic beliefs.

  17. Loss aversion is an affective forecasting error.

    Science.gov (United States)

    Kermer, Deborah A; Driver-Linn, Erin; Wilson, Timothy D; Gilbert, Daniel T

    2006-08-01

    Loss aversion occurs because people expect losses to have greater hedonic impact than gains of equal magnitude. In two studies, people predicted that losses in a gambling task would have greater hedonic impact than would gains of equal magnitude, but when people actually gambled, losses did not have as much of an emotional impact as they predicted. People overestimated the hedonic impact of losses because they underestimated their tendency to rationalize losses and overestimated their tendency to dwell on losses. The asymmetrical impact of losses and gains was thus more a property of affective forecasts than a property of affective experience.

  18. Expressing negative emotions to children: Mothers' aversion sensitivity and children's adjustment.

    Science.gov (United States)

    Moed, Anat; Dix, Theodore; Anderson, Edward R; Greene, Shannon M

    2017-03-01

    Research is unclear about when expressing negative emotions to children performs valuable socialization and regulatory functions and when, instead, it undermines children's adjustment. In this study, we isolated 1 kind of negative expression to test the aversion sensitivity hypothesis: that rapid increases in mothers' negativity as a function of increases in the aversiveness of children's behavior are uniquely problematic for children. During multiple assessments of a divorcing sample over 2 years (N = 284), 12-min interactions between mothers and their 4- to 11-year-old children were recorded. Forty-seven observed child behaviors were ranked from low to high aversive. Within-dyad changes demonstrated that mothers' general negativity-their tendency to express negative emotion at high rates-was unrelated to children's adjustment. In contrast, mothers' aversion-focused negativity-their tendency to increase negative emotional expression rapidly as the aversiveness of children's behavior increased-predicted children's poor social competence, poor emotion regulation, and externalizing behavior problems at the next assessment. The findings suggest that negative expression that reflects mothers' affective sensitivity to aversive child behavior may promote interaction patterns and adaptations in children that are particularly likely to place children at risk for adjustment problems. (PsycINFO Database Record (c) 2017 APA, all rights reserved).

  19. How to make loss aversion disappear and reverse: tests of the decision by sampling origin of loss aversion.

    Science.gov (United States)

    Walasek, Lukasz; Stewart, Neil

    2015-02-01

    One of the most robust empirical findings in the behavioral sciences is loss aversion--the finding that losses loom larger than gains. We offer a new psychological explanation of the origins of loss aversion in which loss aversion emerges from differences in the distribution of gains and losses people experience. In 4 experiments, we tested this proposition by manipulating the range of gains and losses that individuals saw during the process of eliciting their loss aversion. We were able to find loss aversion, loss neutrality, and even the reverse of loss aversion.

  20. The effects of cocaine, alcohol and cocaine/alcohol combinations in conditioned taste aversion learning.

    Science.gov (United States)

    Busse, Gregory D; Verendeev, Andrey; Jones, Jermaine; Riley, Anthony L

    2005-09-01

    We have recently reported that alcohol attenuates cocaine place preferences. Although the basis for this effect is unknown, alcohol may attenuate cocaine reward by potentiating its aversive effects. To examine this possibility, these experiments assessed the effects of alcohol on cocaine-induced taste aversions under conditions similar to those that resulted in attenuated place preferences. Specifically, Experiments 1 and 2 assessed the effects of alcohol (0.5 g/kg) on taste aversions induced by 20, 30 and 40 mg/kg cocaine. Experiment 3 examined the role of intertrial interval in the effects of alcohol (0.5 g/kg) on cocaine (30 mg/kg) taste aversions. In Experiments 1 and 2, cocaine was effective at conditioning aversions. Alcohol produced no measurable effect. Combining cocaine and alcohol produced no greater aversion than cocaine alone (and, in fact, weakened aversions at the lowest dose of cocaine). In Experiment 3, varying the intertrial interval from 3 days (as in the case of Experiments 1 and 2) to 1 day (a procedure identical to that in which alcohol attenuated cocaine place preferences) resulted in significant alcohol- and cocaine-induced taste aversions. Nonetheless, alcohol remained ineffective in potentiating cocaine aversions. Thus, under these conditions alcohol does not potentiate cocaine's aversiveness. These results were discussed in terms of their implication for the effects of alcohol on cocaine-induced place preferences. Further, the effects of alcohol on place preferences conditioned by cocaine were discussed in relation to other assessments of the effects of alcohol on the affective properties of cocaine and the implications of these interactions for alcohol and cocaine co-use.

  1. Risk, Uncertainty, and Entrepreneurship

    DEFF Research Database (Denmark)

    Koudstaal, Martin; Sloof, Randolph; Van Praag, Mirjam

    2016-01-01

    21288). The results indicate that entrepreneurs perceive themselves as less risk averse than managers and employees, in line with common wisdom. However, when using experimental incentivized measures, the differences are subtler. Entrepreneurs are only found to be unique in their lower degree of loss...... aversion, and not in their risk or ambiguity aversion. This combination of results might be explained by our finding that perceived risk attitude is not only correlated to risk aversion but also to loss aversion. Overall, we therefore suggest using a broader definition of risk that captures this unique...... feature of entrepreneurs: their willingness to risk losses....

  2. To answer or not to answer? A field test of loss aversion

    OpenAIRE

    Michał Krawczyk

    2011-01-01

    This study is a field experiment on loss aversion. The framing of scoring rules was differentiated in two exams at the University of Warsaw, with only half the students facing explicit penalty points in the case of giving an incorrect answer. Loss aversion predicts that less risk will be taken (less questions will be answered) when losses are possible but in fact, no treatment effect was observed.

  3. Myopic loss aversion revisited

    OpenAIRE

    Blavatskyy, Pavlo; Pogrebna, Ganna

    2009-01-01

    In this paper we reexamine several experimental papers on myopic loss aversion by analyzing individual rather than aggregate choice patterns. We find that the behavior of the majority of subjects is inconsistent with the hypothesis of myopic loss aversion.

  4. Loss aversion is associated with bilateral insula volume. A voxel based morphometry study.

    Science.gov (United States)

    Markett, S; Heeren, G; Montag, C; Weber, B; Reuter, M

    2016-04-21

    Loss aversion is a decision bias, reflecting a greater sensitivity to losses than to gains in a decision situation. Recent neuroscientific research has shown that mesocorticolimbic structures like ventromedial prefrontal cortex and the ventral striatum constitute a bidirectional neural system that processes gains and losses and exhibits a neural basis of loss aversion. On a functional and structural level, the amygdala and insula also seem to play an important role in the processing of loss averse behavior. By applying voxel-based morphometry to structural brain images in N=41 healthy participants, the current study provides further evidence for the relationship of brain structure and loss aversion. The results show a negative correlation of gray matter volume in bilateral posterior insula as well as left medial frontal gyrus with individual loss aversion. Hence, higher loss aversion is associated with lower gray matter volume in these brain areas. Both structures have been discussed to play important roles in the brain's salience network, where the posterior insula is involved in interoception and the detection of salience. The medial frontal gyrus might impact decision making through its dense connections with the anterior cingulate cortex. A possible explanation for the present finding is that structural differences in these regions alter the processing of losses and salience, possibly biasing decision making towards avoidance of negative outcomes. Copyright © 2016 Elsevier Ireland Ltd. All rights reserved.

  5. An evolutionary game model for behavioral gambit of loyalists: Global awareness and risk-aversion

    Science.gov (United States)

    Alfinito, E.; Barra, A.; Beccaria, M.; Fachechi, A.; Macorini, G.

    2018-02-01

    We study the phase diagram of a minority game where three classes of agents are present. Two types of agents play a risk-loving game that we model by the standard Snowdrift Game. The behaviour of the third type of agents is coded by indifference with respect to the game at all: their dynamics is designed to account for risk-aversion as an innovative behavioral gambit. From this point of view, the choice of this solitary strategy is enhanced when innovation starts, while is depressed when it becomes the majority option. This implies that the payoff matrix of the game becomes dependent on the global awareness of the agents measured by the relevance of the population of the indifferent players. The resulting dynamics is nontrivial with different kinds of phase transition depending on a few model parameters. The phase diagram is studied on regular as well as complex networks.

  6. Aversion to ambiguity and willingness to take risks affect therapeutic decisions in managing atrial fibrillation for stroke prevention: results of a pilot study in family physicians

    Directory of Open Access Journals (Sweden)

    Raptis S

    2017-09-01

    Full Text Available Stavroula Raptis,1,* Jia Ning Chen,2,* Florencia Saposnik,2 Roman Pelyavskyy,2 Andrew Liuni,3 Gustavo Saposnik2,4 On behalf of the Stroke Outcomes Research Canada Working Group (SORCan- www.sorcan.ca 1Applied Health Research Centre, Li Ka Shing Knowledge Institute, 2Stroke Outcomes and Decision Neuroscience Research Unit, Department of Medicine, St. Michael’s Hospital, University of Toronto, Toronto, 3Medical Department, Boehringer Ingelheim (Canada Ltd., Burlington, ON, Canada; 4Neuroeconomics and Decision Neuroscience, Department of Economics, University of Zurich, Zurich, Switzerland *These authors contributed equally to this work Background: Anticoagulation is the therapeutic paradigm for stroke prevention in patients with atrial fibrillation (AF. It is unknown how physicians make treatment decisions in primary stroke prevention for patients with AF. Objectives: To evaluate the association between family physicians’ risk preferences (aversion risk and ambiguity and therapeutic recommendations (anticoagulation in the management of AF for primary stroke prevention by applying concepts from behavioral economics. Methods: Overall, 73 family physicians participated and completed the study. Our study comprised seven simulated case vignettes, three behavioral experiments, and two validated surveys. Behavioral experiments and surveys incorporated an economic framework to determine risk preferences and biases (e.g., ambiguity aversion, willingness to take risks. The primary outcome was making the correct decision of anticoagulation therapy. Secondary outcomes included medical errors in the management of AF for stroke prevention. Results: Overall, 23.3% (17/73 of the family physicians elected not to escalate the therapy from antiplatelets to anticoagulation when recommended by best practice guidelines. A total of 67.1% of physicians selected the correct therapeutic options in two or more of the three simulated case vignettes. Multivariate

  7. Optimal portfolio choice under loss aversion

    NARCIS (Netherlands)

    A.B. Berkelaar (Arjan); R.R.P. Kouwenberg (Roy)

    2000-01-01

    textabstractProspect theory and loss aversion play a dominant role in behavioral finance. In this paper we derive closed-form solutions for optimal portfolio choice under loss aversion. When confronted with gains a loss averse investor behaves similar to a portfolio insurer. When confronted with

  8. Risk, Uncertainty and Entrepreneurship

    DEFF Research Database (Denmark)

    Koudstaal, Martin; Sloof, Randolph; Van Praag, Mirjam

    . Entrepreneurs are only found to be unique in their lower degree of loss aversion, and not in their risk or ambiguity aversion. This combination of results might be explained by our finding that perceived risk attitude is not only correlated to risk aversion but also to loss aversion. Overall, we therefore...... entrepreneurs to managers – a suitable comparison group – and employees (n = 2288). The results indicate that entrepreneurs perceive themselves as less risk averse than managers and employees, in line with common wisdom. However, when using experimental incentivized measures, the differences are subtler...... suggest using a broader definition of risk that captures this unique feature of entrepreneurs; their willingness to risk losses....

  9. Neural markers of loss aversion in resting-state brain activity.

    Science.gov (United States)

    Canessa, Nicola; Crespi, Chiara; Baud-Bovy, Gabriel; Dodich, Alessandra; Falini, Andrea; Antonellis, Giulia; Cappa, Stefano F

    2017-02-01

    Neural responses in striatal, limbic and somatosensory brain regions track individual differences in loss aversion, i.e. the higher sensitivity to potential losses compared with equivalent gains in decision-making under risk. The engagement of structures involved in the processing of aversive stimuli and experiences raises a further question, i.e. whether the tendency to avoid losses rather than acquire gains represents a transient fearful overreaction elicited by choice-related information, or rather a stable component of one's own preference function, reflecting a specific pattern of neural activity. We tested the latter hypothesis by assessing in 57 healthy human subjects whether the relationship between behavioral and neural loss aversion holds at rest, i.e. when the BOLD signal is collected during 5minutes of cross-fixation in the absence of an explicit task. Within the resting-state networks highlighted by a spatial group Independent Component Analysis (gICA), we found a significant correlation between strength of activity and behavioral loss aversion in the left ventral striatum and right posterior insula/supramarginal gyrus, i.e. the very same regions displaying a pattern of neural loss aversion during explicit choices. Cross-study analyses confirmed that this correlation holds when voxels identified by gICA are used as regions of interest in task-related activity and vice versa. These results suggest that the individual degree of (neural) loss aversion represents a stable dimension of decision-making, which reflects in specific metrics of intrinsic brain activity at rest possibly modulating cortical excitability at choice. Copyright © 2016 Elsevier Inc. All rights reserved.

  10. Colour Separation and Aversion

    Directory of Open Access Journals (Sweden)

    Sarah M Haigh

    2012-05-01

    Full Text Available Aversion to achromatic patterns is well documented but relatively little is known about discomfort from chromatic patterns. Large colour differences are uncommon in the natural environment and deviation from natural statistics makes images uncomfortable (Fernandez and Wilkins 2008, Perception, 37(7, 1098–113; Juricevic et al 2010, Perception, 39(7, 884–899. We report twelve studies documenting a linear increase in aversion to chromatic square-wave gratings as a function of the separation in UCS chromaticity between the component bars, independent of their luminance contrast. Two possible explanations for the aversion were investigated: (1 accommodative response, or (2 cortical metabolic demand. We found no correlation between chromaticity separation and accommodative lag or variance in lag, measured using an open-field autorefractor. However, near infrared spectroscopy of the occipital cortex revealed a larger oxyhaemoglobin response to patterns with large chromaticity separation. The aversion may be cortical in origin and does not appear to be due to accommodation.

  11. Visual Aversive Learning Compromises Sensory Discrimination.

    Science.gov (United States)

    Shalev, Lee; Paz, Rony; Avidan, Galia

    2018-03-14

    Aversive learning is thought to modulate perceptual thresholds, which can lead to overgeneralization. However, it remains undetermined whether this modulation is domain specific or a general effect. Moreover, despite the unique role of the visual modality in human perception, it is unclear whether this aspect of aversive learning exists in this modality. The current study was designed to examine the effect of visual aversive outcomes on the perception of basic visual and auditory features. We tested the ability of healthy participants, both males and females, to discriminate between neutral stimuli, before and after visual learning. In each experiment, neutral stimuli were associated with aversive images in an experimental group and with neutral images in a control group. Participants demonstrated a deterioration in discrimination (higher discrimination thresholds) only after aversive learning. This deterioration was measured for both auditory (tone frequency) and visual (orientation and contrast) features. The effect was replicated in five different experiments and lasted for at least 24 h. fMRI neural responses and pupil size were also measured during learning. We showed an increase in neural activations in the anterior cingulate cortex, insula, and amygdala during aversive compared with neutral learning. Interestingly, the early visual cortex showed increased brain activity during aversive compared with neutral context trials, with identical visual information. Our findings imply the existence of a central multimodal mechanism, which modulates early perceptual properties, following exposure to negative situations. Such a mechanism could contribute to abnormal responses that underlie anxiety states, even in new and safe environments. SIGNIFICANCE STATEMENT Using a visual aversive-learning paradigm, we found deteriorated discrimination abilities for visual and auditory stimuli that were associated with visual aversive stimuli. We showed increased neural

  12. Neural systems underlying aversive conditioning in humans with primary and secondary reinforcers

    Directory of Open Access Journals (Sweden)

    Mauricio R Delgado

    2011-05-01

    Full Text Available Money is a secondary reinforcer commonly used across a range of disciplines in experimental paradigms investigating reward learning and decision-making. The effectiveness of monetary reinforcers during aversive learning and its neural basis, however, remains a topic of debate. Specifically, it is unclear if the initial acquisition of aversive representations of monetary losses depends on similar neural systems as more traditional aversive conditioning that involves primary reinforcers. This study contrasts the efficacy of a biologically defined primary reinforcer (shock and a socially defined secondary reinforcer (money during aversive learning and its associated neural circuitry. During a two-part experiment, participants first played a gambling game where wins and losses were based on performance to gain an experimental bank. Participants were then exposed to two separate aversive conditioning sessions. In one session, a primary reinforcer (mild shock served as an unconditioned stimulus (US and was paired with one of two colored squares, the conditioned stimuli (CS+ and CS-, respectively. In another session, a secondary reinforcer (loss of money served as the US and was paired with one of two different CS. Skin conductance responses were greater for CS+ compared to CS- trials irrespective of type of reinforcer. Neuroimaging results revealed that the striatum, a region typically linked with reward-related processing, was found to be involved in the acquisition of aversive conditioned response irrespective of reinforcer type. In contrast, the amygdala was involved during aversive conditioning with primary reinforcers, as suggested by both an exploratory fMRI analysis and a follow-up case study with a patient with bilateral amygdala damage. Taken together, these results suggest that learning about potential monetary losses may depend on reinforcement learning related systems, rather than on typical structures involved in more biologically based

  13. Risk sensitivity as an evolutionary adaptation

    Science.gov (United States)

    Hintze, Arend; Olson, Randal S.; Adami, Christoph; Hertwig, Ralph

    2015-02-01

    Risk aversion is a common behavior universal to humans and animals alike. Economists have traditionally defined risk preferences by the curvature of the utility function. Psychologists and behavioral economists also make use of concepts such as loss aversion and probability weighting to model risk aversion. Neurophysiological evidence suggests that loss aversion has its origins in relatively ancient neural circuitries (e.g., ventral striatum). Could there thus be an evolutionary origin to risk aversion? We study this question by evolving strategies that adapt to play the equivalent mean payoff gamble. We hypothesize that risk aversion in this gamble is beneficial as an adaptation to living in small groups, and find that a preference for risk averse strategies only evolves in small populations of less than 1,000 individuals, or in populations segmented into groups of 150 individuals or fewer - numbers thought to be comparable to what humans encountered in the past. We observe that risk aversion only evolves when the gamble is a rare event that has a large impact on the individual's fitness. As such, we suggest that rare, high-risk, high-payoff events such as mating and mate competition could have driven the evolution of risk averse behavior in humans living in small groups.

  14. Risk sensitivity as an evolutionary adaptation

    Science.gov (United States)

    Hintze, Arend; Olson, Randal S.; Adami, Christoph; Hertwig, Ralph

    2015-01-01

    Risk aversion is a common behavior universal to humans and animals alike. Economists have traditionally defined risk preferences by the curvature of the utility function. Psychologists and behavioral economists also make use of concepts such as loss aversion and probability weighting to model risk aversion. Neurophysiological evidence suggests that loss aversion has its origins in relatively ancient neural circuitries (e.g., ventral striatum). Could there thus be an evolutionary origin to risk aversion? We study this question by evolving strategies that adapt to play the equivalent mean payoff gamble. We hypothesize that risk aversion in this gamble is beneficial as an adaptation to living in small groups, and find that a preference for risk averse strategies only evolves in small populations of less than 1,000 individuals, or in populations segmented into groups of 150 individuals or fewer – numbers thought to be comparable to what humans encountered in the past. We observe that risk aversion only evolves when the gamble is a rare event that has a large impact on the individual's fitness. As such, we suggest that rare, high-risk, high-payoff events such as mating and mate competition could have driven the evolution of risk averse behavior in humans living in small groups. PMID:25649757

  15. My loss is your loss ... Sometimes: loss aversion and the effect of motivational biases.

    Science.gov (United States)

    Wilson, Robyn S; Arvai, Joseph L; Arkes, Hal R

    2008-08-01

    Findings from previous studies of individual decision-making behavior predict that losses will loom larger than gains. It is less clear, however, if this loss aversion applies to the way in which individuals attribute value to the gains and losses of others, or if it is robust across a broad spectrum of policy and management decision contexts. Consistent with previous work, the results from a series of experiments reported here revealed that subjects exhibited loss aversion when evaluating their own financial gains and losses. The presence of loss aversion was also confirmed for the way in which individuals attribute value to the financial gains and losses of others. However, similar evaluations within social and environmental contexts did not exhibit loss aversion. In addition, research subjects expected that individuals who were unknown to them would significantly undervalue the subjects' own losses across all contexts. The implications of these findings for risk-based policy and management are many. Specifically, they warrant caution when relying upon loss aversion to explain or predict the reaction of affected individuals to risk-based decisions that involve moral or protected values. The findings also suggest that motivational biases may lead decisionmakers to assume that their attitudes and beliefs are common among those affected by a decision, while those affected may expect unfamiliar others to be unable to identify and act in accordance with shared values.

  16. Does ambiguity aversion influence the framing effect during decision making?

    Science.gov (United States)

    Osmont, Anaïs; Cassotti, Mathieu; Agogué, Marine; Houdé, Olivier; Moutier, Sylvain

    2015-04-01

    Decision-makers present a systematic tendency to avoid ambiguous options for which the level of risk is unknown. This ambiguity aversion is one of the most striking decision-making biases. Given that human choices strongly depend on the options' presentation, the purpose of the present study was to examine whether ambiguity aversion influences the framing effect during decision making. We designed a new financial decision-making task involving the manipulation of both frame and uncertainty levels. Thirty-seven participants had to choose between a sure option and a gamble depicting either clear or ambiguous probabilities. The results revealed a clear preference for the sure option in the ambiguity condition regardless of frame. However, participants presented a framing effect in both the risk and ambiguity conditions. Indeed, the framing effect was bidirectional in the risk condition and unidirectional in the ambiguity condition given that it did not involve preference reversal but only a more extreme choice tendency.

  17. Therapeutic Decisions in Atrial Fibrillation for Stroke Prevention: The Role of Aversion to Ambiguity and Physicians' Risk Preferences.

    Science.gov (United States)

    Sposato, Luciano A; Stirling, Devin; Saposnik, Gustavo

    2018-04-09

    Knowledge-to-action gaps influence therapeutic decisions in atrial fibrillation (AF). Physician-related factors are common, but the least studied. We evaluated the prevalence and determinants of physician-related factors and knowledge-to-action gaps among physicians involved in the management of AF patients. In this cross-sectional study, participants from 6 South American countries recruited during an educational program answered questions regarding 16 case scenarios of patients with AF and completed experiments assessing 3 outcome measures: therapeutic inertia, herding, and errors in risk stratification knowledge translated into action (ERSKTA) based on commonly used stratification tools (Congestive heart failure, Hypertension, Age ≥75 years (double), Diabetes mellitus, previous Stroke/transient ischemic attack/thromboembolism (double), Vascular disease, Age 65-74 years, and female gender (score of 0 for males and 1 for female) (CHA 2 DS 2 -VASc) and Congestive heart failure, Hypertension, Age ≥75 years, Diabetes mellitus, and previous Stroke/transient ischemic attack (double) (CHADS 2 )). Logistic regression analysis was conducted to determine factors associated with the outcomes. Overall, 149 physicians were invited to participate, of which 88 (59.1%) completed the online assessment tool. Cardiology was the most frequent specialty (69.3%). Therapeutic inertia was present in 53 participants (60.2%), herding in 66 (75.0%), and ERSKTA in 46 (52.3%). Therapeutic inertia was inversely associated with willingness to take financial risks (odds ratio [OR] .72, 95% confidence interval [CI] .59-.89 per point in the financial risk propensity score), herding was associated with aversion to ambiguity in the medical domain (OR 5.35, 95% CI 1.40-20.46), and ERSKTA was associated with the willingness to take risks (OR 1.70, 95% CI 1.15-2.50, per point in score). Among physicians involved in stroke prevention in AF, individual risk preferences and aversion to ambiguity lead

  18. Deciding for Others Reduces Loss Aversion

    DEFF Research Database (Denmark)

    Andersson, Ola; Holm, Håkan J.; Tyran, Jean-Robert Karl

    We study risk taking on behalf of others, both with and without potential losses. A large-scale incentivized experiment is conducted with subjects randomly drawn from the Danish population. On average, decision makers take the same risks for other people as for themselves when losses are excluded....... In contrast, when losses are possible, decisions on behalf of others are more risky. Using structural estimation, we show that this increase in risk stems from a decrease in loss aversion when others are affected by their choices.......We study risk taking on behalf of others, both with and without potential losses. A large-scale incentivized experiment is conducted with subjects randomly drawn from the Danish population. On average, decision makers take the same risks for other people as for themselves when losses are excluded...

  19. Suppressing epidemic spreading by risk-averse migration in dynamical networks

    Science.gov (United States)

    Yang, Han-Xin; Tang, Ming; Wang, Zhen

    2018-01-01

    In this paper, we study the interplay between individual behaviors and epidemic spreading in a dynamical network. We distribute agents on a square-shaped region with periodic boundary conditions. Every agent is regarded as a node of the network and a wireless link is established between two agents if their geographical distance is less than a certain radius. At each time, every agent assesses the epidemic situation and make decisions on whether it should stay in or leave its current place. An agent will leave its current place with a speed if the number of infected neighbors reaches or exceeds a critical value E. Owing to the movement of agents, the network's structure is dynamical. Interestingly, we find that there exists an optimal value of E leading to the maximum epidemic threshold. This means that epidemic spreading can be effectively controlled by risk-averse migration. Besides, we find that the epidemic threshold increases as the recovering rate increases, decreases as the contact radius increases, and is maximized by an optimal moving speed. Our findings offer a deeper understanding of epidemic spreading in dynamical networks.

  20. Risk aversion, time preference and health production: theory and empirical evidence from Cambodia.

    Science.gov (United States)

    Rieger, Matthias

    2015-04-01

    This paper quantifies the relationship between risk aversion and discount rates on the one hand and height and weight on the other. It studies this link in the context of poor households in Cambodia. Evidence is based on an original dataset that contains both experimental measures of risk taking and impatience along with anthropometric measurements of children and adults. The aim of the paper is to (i) explore the importance of risk and time preferences in explaining undernutrition and (ii) compare the evidence stemming from poor households to strikingly similar findings from industrialized countries. It uses an inter-generational approach to explain observed correlations in adults and children that is inspired by the height premium on labor markets. Parents can invest in the health capital of their child to increase future earnings and their consumption when old: better nutrition during infancy translates into better human capital and better wages, and ultimately better financial means to take care of elderly parents. However this investment is subject to considerable uncertainty, since parents neither perfectly foresee economic conditions when the child starts earning nor fully observe the ability to transform nutritional investments into long-term health capital. As a result, risk taking households have taller and heavier children. Conversely, impatience does not affect child health. In the case of adults, only weight and the body mass index (BMI), but not height, are positively and moderately correlated with risk taking and impatience. Copyright © 2014 Elsevier B.V. All rights reserved.

  1. Strategic and Tactical Design of Competing Decentralized Supply Chain Networks with Risk-Averse Participants for Markets with Uncertain Demand

    OpenAIRE

    Hafezalkotob, Ashkan; Makui, Ahmad; Sadjadi, Seyed Jafar

    2011-01-01

    An integrated equilibrium model for tactical decisions in network design is developed. We consider a decentralized supply chain network operating in markets under uncertain demands when there is a rival decentralized chain. The primary assumption is that two chains provide partial substitutable products to the markets, and markets' demands are affected by tactical decisions such as price, service level, and advertising expenditure. Each chain consists of one risk-averse manufacturer and a set...

  2. A pilot study of loss aversion for drug and non-drug commodities in cocaine users.

    Science.gov (United States)

    Strickland, Justin C; Beckmann, Joshua S; Rush, Craig R; Stoops, William W

    2017-11-01

    Numerous studies in behavioral economics have demonstrated that individuals are more sensitive to the prospect of a loss than a gain (i.e., loss aversion). Although loss aversion has been well described in "healthy" populations, little research exists in individuals with substance use disorders. This gap is notable considering the prominent role that choice and decision-making play in drug use. The purpose of this pilot study was to evaluate loss aversion in active cocaine users. Current cocaine users (N=38; 42% female) participated in this within-subjects laboratory pilot study. Subjects completed a battery of tasks designed to assess loss aversion for drug and non-drug commodities under varying risk conditions. Standardized loss aversion coefficients (λ) were compared to theoretically and empirically relevant normative values (i.e., λ=2). Compared to normative loss aversion coefficient values, a precise and consistent decrease in loss aversion was observed in cocaine users (sample λ≈1). These values were observed across drug and non-drug commodities as well as under certain and risky conditions. These data represent the first systematic study of loss aversion in cocaine-using populations and provide evidence for equal sensitivity to losses and gains or loss equivalence. Futures studies should evaluate the specificity of these effects to a history of cocaine use as well as the impact of manipulations of loss aversion on drug use to determine how this phenomenon may contribute to intervention development efforts. Copyright © 2017 Elsevier B.V. All rights reserved.

  3. Reward-centricity and attenuated aversions: An adolescent phenotype emerging from studies in laboratory animals.

    Science.gov (United States)

    Doremus-Fitzwater, Tamara L; Spear, Linda P

    2016-11-01

    Adolescence is an evolutionarily conserved developmental period, with neural circuits and behaviors contributing to the detection, procurement, and receipt of rewards bearing similarity across species. Studies with laboratory animals suggest that adolescence is typified by a "reward-centric" phenotype-an increased sensitivity to rewards relative to adults. In contrast, adolescent rodents are reportedly less sensitive to the aversive properties of many drugs and naturally aversive stimuli. Alterations within the mesocorticolimbic dopamine and endocannabinoid systems likely contribute to an adolescent reward-sensitive, yet aversion-resistant, phenotype. Although early hypotheses postulated that developmental changes in dopaminergic circuitry would result in a "reward deficiency" syndrome, evidence now suggests the opposite: that adolescents are uniquely poised to seek out hedonic stimuli, experience greater "pleasure" from rewards, and consume rewarding stimuli in excess. Future studies that more clearly define the role of specific brain regions and neurotransmitter systems in the expression of behaviors toward reward- and aversive-related cues and stimuli are necessary to more fully understand an adolescent-proclivity for and vulnerability to rewards and drugs of potential abuse. Copyright © 2016 Elsevier Ltd. All rights reserved.

  4. A risk-averse optimization model for trading wind energy in a market environment under uncertainty

    International Nuclear Information System (INIS)

    Pousinho, H.M.I.; Mendes, V.M.F.; Catalao, J.P.S.

    2011-01-01

    In this paper, a stochastic programming approach is proposed for trading wind energy in a market environment under uncertainty. Uncertainty in the energy market prices is the main cause of high volatility of profits achieved by power producers. The volatile and intermittent nature of wind energy represents another source of uncertainty. Hence, each uncertain parameter is modeled by scenarios, where each scenario represents a plausible realization of the uncertain parameters with an associated occurrence probability. Also, an appropriate risk measurement is considered. The proposed approach is applied on a realistic case study, based on a wind farm in Portugal. Finally, conclusions are duly drawn. -- Highlights: → We model uncertainties on energy market prices and wind power production. → A hybrid intelligent approach generates price-wind power scenarios. → Risk aversion is also incorporated in the proposed stochastic programming approach. → A realistic case study, based on a wind farm in Portugal, is provided. → Our approach allows selecting the best solution according to the desired risk exposure level.

  5. Perceptions of risk, risk aversion, and barriers to adoption of decision support systems and integrated pest management: an introduction.

    Science.gov (United States)

    Gent, David H; De Wolf, Erick; Pethybridge, Sarah J

    2011-06-01

    Rational management of plant diseases, both economically and environmentally, involves assessing risks and the costs associated with both correct and incorrect tactical management decisions to determine when control measures are warranted. Decision support systems can help to inform users of plant disease risk and thus assist in accurately targeting events critical for management. However, in many instances adoption of these systems for use in routine disease management has been perceived as slow. The under-utilization of some decision support systems is likely due to both technical and perception constraints that have not been addressed adequately during development and implementation phases. Growers' perceptions of risk and their aversion to these perceived risks can be reasons for the "slow" uptake of decision support systems and, more broadly, integrated pest management (IPM). Decision theory provides some tools that may assist in quantifying and incorporating subjective and/or measured probabilities of disease occurrence or crop loss into decision support systems. Incorporation of subjective probabilities into IPM recommendations may be one means to reduce grower uncertainty and improve trust of these systems because management recommendations could be explicitly informed by growers' perceptions of risk and economic utility. Ultimately though, we suggest that an appropriate measure of the value and impact of decision support systems is grower education that enables more skillful and informed management decisions independent of consultation of the support tool outputs.

  6. Aversive racism in Spain: testing the theory

    NARCIS (Netherlands)

    Wojcieszak, M.

    2015-01-01

    This study applies the aversive racism framework to Spain and tests whether aversive racism depends on intergroup contact. Relying on a 3 (qualifications) by 3 (ethnicity) experiment, this study finds that aversive racism is especially pronounced against the Mexican job applicant, and emerges among

  7. Loss aversion and rent-seeking: An experimental study

    OpenAIRE

    Kong, Xiaojing

    2008-01-01

    We report an experiment designed to evaluate the impact of loss aversion on rent-seeking contests. We find, as theoretically predicted, a negative relationship between rent-seeking expenditures and loss aversion. However, for any degree of loss aversion, levels of rent-seeking expenditure are higher than predicted. Moreover, we find that the effect of loss aversion becomes weaker with repetition of the contest.

  8. Women at greater risk of HIV infection.

    Science.gov (United States)

    Mahathir, M

    1997-04-01

    Although many people believe that mainly men get infected with HIV/AIDS, women are actually getting infected at a faster rate than men, especially in developing countries, and suffer more from the adverse impact of AIDS. As of mid-1996, the Joint UN Program on AIDS estimated that more than 10 million of the 25 million adults infected with HIV since the beginning of the epidemic are women. The proportion of HIV-positive women is growing, with almost half of the 7500 new infections daily occurring among women. 90% of HIV-positive women live in a developing country. In Asia-Pacific, 1.4 million women have been infected with HIV out of an estimated total 3.08 million adults from the late 1970s until late 1994. Biologically, women are more vulnerable than men to infection because of the greater mucus area exposed to HIV during penile penetration. Women under age 17 years are at even greater risk because they have an underdeveloped cervix and low vaginal mucus production. Concurrent sexually transmitted diseases increase the risk of HIV transmission. Women's risk is also related to their exposure to gender inequalities in society. The social and economic pressures of poverty exacerbate women's risk. Prevention programs are discussed.

  9. Interactions between radiation and amphetamine in taste aversion learning and the role of the area postrema in amphetamine-induced conditioned taste aversions

    International Nuclear Information System (INIS)

    Rabin, B.M.; Hunt, W.A.; Lee, J.

    1987-01-01

    Three experiments were run to assess the role of the area postrema in taste aversion learning resulting from combined treatment with subthreshold unconditioned stimuli and in the acquisition of an amphetamine-induced taste aversion. In the first experiment, it was shown that combined treatment with subthreshold radiation (15 rad) and subthreshold amphetamine (0.5 mg/kg, IP) resulted in the acquisition of a taste aversion. The second experiment showed that lesions of the area postrema blocked taste aversion learning produced by two subthreshold doses of amphetamine. In the third experiment, which looked at the dose-response curve for amphetamine-induced taste aversion learning in intact rats and rats with area postrema lesions, it was shown that both groups of rats acquired taste aversions following injection of amphetamine, although the rats with lesions showed a less severe aversion than the intact rats. The results are interpreted as indicating that amphetamine-induced taste aversion learning may involve area postrema-mediated mechanisms, particularly at the lower doses, but that an intact area postrema is not a necessary condition for the acquisition of an amphetamine-induced taste aversion

  10. Social influences on inequity aversion in children.

    Directory of Open Access Journals (Sweden)

    Katherine McAuliffe

    Full Text Available Adults and children are willing to sacrifice personal gain to avoid both disadvantageous and advantageous inequity. These two forms of inequity aversion follow different developmental trajectories, with disadvantageous inequity aversion emerging around 4 years and advantageous inequity aversion emerging around 8 years. Although inequity aversion is assumed to be specific to situations where resources are distributed among individuals, the role of social context has not been tested in children. Here, we investigated the influence of two aspects of social context on inequity aversion in 4- to 9-year-old children: (1 the role of the experimenter distributing rewards and (2 the presence of a peer with whom rewards could be shared. Experiment 1 showed that children rejected inequity at the same rate, regardless of whether the experimenter had control over reward allocations. This indicates that children's decisions are based upon reward allocations between themselves and a peer and are not attempts to elicit more favorable distributions from the experimenter. Experiment 2 compared rejections of unequal reward allocations in children interacting with or without a peer partner. When faced with a disadvantageous distribution, children frequently rejected a smaller reward when a larger reward was visible, even if no partner would obtain the larger reward. This suggests that nonsocial factors partly explain disadvantageous inequity rejections. However, rejections of disadvantageous distributions were higher when the larger amount would go to a peer, indicating that social context enhances disadvantageous inequity aversion. By contrast, children rejected advantageous distributions almost exclusively in the social context. Therefore, advantageous inequity aversion appears to be genuinely social, highlighting its potential relevance for the development of fairness concerns. By comparing social and nonsocial factors, this study provides a detailed picture of

  11. Impact of risk aversion and disease outbreak characteristics on the incentives of producers as a group to participate in animal disease insurance-A simulation.

    Science.gov (United States)

    Niemi, Jarkko K; Heikkilä, Jaakko

    2011-06-01

    The participation of agricultural producers in financing losses caused by livestock epidemics has been debated in many countries. One of the issues raised is how reluctant producers are to participate voluntarily in the financing of disease losses before an outbreak occurs. This study contributes to the literature by examining whether disease losses should be financed through pre- or post-outbreak premiums or their combination. A Monte Carlo simulation was employed to illustrate the costs of financing two diseases of different profiles. The profiles differed in the probability in which the damage occurs and in the average damage per event. Three hypothetical financing schemes were compared based on their ability to reduce utility losses in the case of risk-neutral and risk-averse producer groups. The schemes were examined in a dynamic setting where premiums depended on the compensation history of the sector. If producers choose the preferred financing scheme based on utility losses, results suggest that the timing of the premiums, the transaction costs of the scheme, the degree of risk aversion of the producer, and the level and the volatility of premiums affect the choice of the financing scheme. Copyright © 2011 Elsevier B.V. All rights reserved.

  12. Pupillometry reveals the physiological underpinnings of the aversion to holes.

    Science.gov (United States)

    Ayzenberg, Vladislav; Hickey, Meghan R; Lourenco, Stella F

    2018-01-01

    An unusual, but common, aversion to images with clusters of holes is known as trypophobia. Recent research suggests that trypophobic reactions are caused by visual spectral properties also present in aversive images of evolutionary threatening animals (e.g., snakes and spiders). However, despite similar spectral properties, it remains unknown whether there is a shared emotional response to holes and threatening animals. Whereas snakes and spiders are known to elicit a fear reaction, associated with the sympathetic nervous system, anecdotal reports from self-described trypophobes suggest reactions more consistent with disgust, which is associated with activation of the parasympathetic nervous system. Here we used pupillometry in a novel attempt to uncover the distinct emotional response associated with a trypophobic response to holes. Across two experiments, images of holes elicited greater constriction compared to images of threatening animals and neutral images. Moreover, this effect held when controlling for level of arousal and accounting for the pupil grating response. This pattern of pupillary response is consistent with involvement of the parasympathetic nervous system and suggests a disgust, not a fear, response to images of holes. Although general aversion may be rooted in shared visual-spectral properties, we propose that the specific emotion is determined by cognitive appraisal of the distinct image content.

  13. Coordinating a Supply Chain with a Loss-Averse Retailer under Yield and Demand Uncertainties

    Directory of Open Access Journals (Sweden)

    Weiwei Luo

    2016-01-01

    Full Text Available This paper investigates the channel coordination of a supply chain (SC consisting of a loss-averse retailer and a risk-neutral supplier under yield and demand uncertainties. Three existing contracts are analyzed. Our results demonstrate that the buyback (BB and quantity flexibility (QF contracts can not only coordinate the supply chain but also lead to Pareto improvement for each player, while the wholesale price (WP contract fails to coordinate the chain due to the effects of double marginalization and risk preference. For comparison, a chain with a risk-neutral retailer is also analyzed. Furthermore, numerical examples are provided to demonstrate the effectiveness of the coordination contracts, and the impacts of loss aversion and random yield on the decision-making behaviors and system performance are then discussed.

  14. Infection of male rats with Toxoplasma gondii induces effort-aversion in a T-maze decision-making task.

    Science.gov (United States)

    Tan, Donna; Vyas, Ajai

    2016-03-01

    Rats chronically infected with protozoan Toxoplasma gondii exhibit greater delay aversion in an inter-temporal task. Moreover T. gondii infection also results in dendritic atrophy of basolateral amygdala neurons. Basolateral amygdala is reported to bias decision making towards greater effortful alternatives. In this context, we report that T. gondii increases effort aversion in infected male rats. This host-parasite association has been widely studied in the context of loss of innate fear in the infected males. It is suggested that reduced fear towards predators reflects a parasitic behavioral manipulation to enhance trophic transmission of T. gondii. Observations reported here extend this paradigm away from a monolithic change in fear and towards a multi-dimensional change in decision making. Copyright © 2016 Elsevier Inc. All rights reserved.

  15. Role for the Rostromedial Tegmental Nucleus in Signaling the Aversive Properties of Alcohol.

    Science.gov (United States)

    Glover, Elizabeth J; McDougle, Molly J; Siegel, Griffin S; Jhou, Thomas C; Chandler, L Judson

    2016-08-01

    While the rewarding effects of alcohol contribute significantly to its addictive potential, it is becoming increasingly appreciated that alcohol's aversive properties also play an important role in the propensity to drink. Despite this, the neurobiological mechanism for alcohol's aversive actions is not well understood. The rostromedial tegmental nucleus (RMTg) was recently characterized for its involvement in aversive signaling and has been shown to encode the aversive properties of cocaine, yet its involvement in alcohol's aversive actions have not been elucidated. Adult male and female Long-Evans rats underwent conditioned taste aversion (CTA) procedures where exposure to a novel saccharin solution was paired with intraperitoneal administration of saline, lithium chloride (LiCl), or ethanol (EtOH). Control rats underwent the same paradigm except that drug and saccharin exposure were explicitly unpaired. Saccharin consumption was measured on test day in the absence of drug administration, and rats were sacrificed 90 to 105 minutes following access to saccharin. Brains were subsequently harvested and processed for cFos immunohistochemistry. The number of cFos-labeled neurons was counted in the RMTg and the lateral habenula (LHb)-a region that sends prominent glutamatergic input to the RMTg. In rats that received paired drug and saccharin exposure, EtOH and LiCl induced significant CTA compared to saline to a similar degree in males and females. Both EtOH- and LiCl-induced CTA significantly enhanced cFos expression in the RMTg and LHb but not the hippocampus. Similar to behavioral measures, no significant effect of sex on CTA-induced cFos expression was observed. cFos expression in both the RMTg and LHb was significantly correlated with CTA magnitude with greater cFos being associated with more pronounced CTA. In addition, cFos expression in the RMTg was positively correlated with LHb cFos. These data suggest that the RMTg and LHb are involved in the expression of

  16. Aversion substance(s) of the rat coagulating glands

    Science.gov (United States)

    Gawienowski, Anthony M.; Berry, Iver J.; Kennelly, James J.

    1982-01-01

    The aversive substance(s) present in adult male urine were not found in castrate rat urine. Removal of the coagulating glands also resulted in a loss of the aversion compounds. The aversion substances were restored to the urine after androgen treatment of the castrate rats.

  17. Aversive Learning and Trait Aggression Influence Retaliatory Behavior.

    Science.gov (United States)

    Molapour, Tanaz; Lindström, Björn; Olsson, Andreas

    2016-01-01

    In two experiments (n = 35, n = 34), we used a modified fear-conditioning paradigm to investigate the role of aversive learning in retaliatory behavior in social context. Participants first completed an initial aversive learning phase in which the pairing of a neutral conditioned stimulus (CS; i.e., neutral face) with a naturally aversive unconditioned stimulus (US; electric shock) was learned. Then they were given an opportunity to interact (i.e., administer 0-2 shocks) with the same faces again, during a Test phase. In Experiment 2, we used the same paradigm with the addition of online trial-by-trial ratings (e.g., US expectancy and anger) to examine the role of aversive learning, anger, and the learned expectancy of receiving punishment more closely. Our results indicate that learned aversions influenced future retaliation in a social context. In both experiments, participants showed largest skin conductance responses (SCRs) to the faces paired with one or two shocks, demonstrating successful aversive learning. Importantly, participants administered more shocks to the faces paired with the most number of shocks when the opportunity was given during test. Also, our results revealed that aggressive traits (Buss and Perry Aggression scale) were associated with retaliation only toward CSs associated with aversive experiences. These two experiments show that aggressive traits, when paired with aversive learning experiences enhance the likelihood to act anti-socially toward others.

  18. An Aversion-Desensitization Treatment for Alcoholism

    Science.gov (United States)

    Primo, Richard V.; And Others

    1972-01-01

    A six-to nine-month interview follow-up showed that five of the seven traceable Ss given the interpersonal aversion-systematic desensitization treatment had been abstinent, compared with only one of seven treated by the interpersonal aversion-control procedure. (Author)

  19. Aging and loss decision making: increased risk aversion and decreased use of maximizing information, with correlated rationality and value maximization.

    Science.gov (United States)

    Kurnianingsih, Yoanna A; Sim, Sam K Y; Chee, Michael W L; Mullette-Gillman, O'Dhaniel A

    2015-01-01

    We investigated how adult aging specifically alters economic decision-making, focusing on examining alterations in uncertainty preferences (willingness to gamble) and choice strategies (what gamble information influences choices) within both the gains and losses domains. Within each domain, participants chose between certain monetary outcomes and gambles with uncertain outcomes. We examined preferences by quantifying how uncertainty modulates choice behavior as if altering the subjective valuation of gambles. We explored age-related preferences for two types of uncertainty, risk, and ambiguity. Additionally, we explored how aging may alter what information participants utilize to make their choices by comparing the relative utilization of maximizing and satisficing information types through a choice strategy metric. Maximizing information was the ratio of the expected value of the two options, while satisficing information was the probability of winning. We found age-related alterations of economic preferences within the losses domain, but no alterations within the gains domain. Older adults (OA; 61-80 years old) were significantly more uncertainty averse for both risky and ambiguous choices. OA also exhibited choice strategies with decreased use of maximizing information. Within OA, we found a significant correlation between risk preferences and choice strategy. This linkage between preferences and strategy appears to derive from a convergence to risk neutrality driven by greater use of the effortful maximizing strategy. As utility maximization and value maximization intersect at risk neutrality, this result suggests that OA are exhibiting a relationship between enhanced rationality and enhanced value maximization. While there was variability in economic decision-making measures within OA, these individual differences were unrelated to variability within examined measures of cognitive ability. Our results demonstrate that aging alters economic decision-making for

  20. Aging and loss decision making: increased risk aversion and decreased use of maximizing information, with correlated rationality and value maximization

    Directory of Open Access Journals (Sweden)

    Yoanna Arlina Kurnianingsih

    2015-05-01

    Full Text Available We investigated how adult aging specifically alters economic decision-making, focusing on examining alterations in uncertainty preferences (willingness to gamble and choice strategies (what gamble information influences choices within both the gains and losses domains. Within each domain, participants chose between certain monetary outcomes and gambles with uncertain outcomes. We examined preferences by quantifying how uncertainty modulates choice behavior as if altering the subjective valuation of gambles. We explored age-related preferences for two types of uncertainty, risk and ambiguity. Additionally, we explored how aging may alter what information participants utilize to make their choices by comparing the relative utilization of maximizing and satisficing information types through a choice strategy metric. Maximizing information was the ratio of the expected value of the two options, while satisficing information was the probability of winning.We found age-related alterations of economic preferences within the losses domain, but no alterations within the gains domain. Older adults (OA; 61 to 80 years old were significantly more uncertainty averse for both risky and ambiguous choices. OA also exhibited choice strategies with decreased use of maximizing information. Within OA, we found a significant correlation between risk preferences and choice strategy. This linkage between preferences and strategy appears to derive from a convergence to risk neutrality driven by greater use of the effortful maximizing strategy. As utility maximization and value maximization intersect at risk neutrality, this result suggests that OA are exhibiting a relationship between enhanced rationality and enhanced value maximization. While there was variability in economic decision-making measures within OA, these individual differences were unrelated to variability within examined measures of cognitive ability. Our results demonstrate that aging alters economic

  1. Good luck, bad luck, and ambiguity aversion

    OpenAIRE

    Briony D. Pulford; Poonam Gill

    2014-01-01

    We report a series of experiments investigating the influence of feeling lucky or unlucky on people's choice of known-risk or ambiguous options using the traditional Ellsberg Urns decision-making task. We induced a state of feeling lucky or unlucky in subjects by using a rigged wheel-of-fortune game, which just missed either the bankrupt or the jackpot outcome. In the first experiment a large reversal of the usual ambiguity aversion effect was shown, indicating that feeling ...

  2. Are Teams Less Inequality Averse than Individuals?

    OpenAIRE

    He, Haoran; Villeval, Marie Claire

    2014-01-01

    We compare inequality aversion in individuals and teams by means of both within- and between-subject experimental designs, and we investigate how teams aggregate individual preferences. We find that team decisions reveal less inequality aversion than individual initial proposals in team decision-making. However, teams are no more selfish than individuals who decide in isolation. Individuals express strategically more inequality aversion in their initial proposals in team decision-making becau...

  3. How to Make Loss Aversion Disappear and Reverse: Tests of the Decision by Sampling Origin of Loss Aversion

    OpenAIRE

    Walasek, Lukasz; Stewart, Neil

    2014-01-01

    One of the most robust empirical findings in the behavioral sciences is loss aversion—the finding that losses loom larger than gains. We offer a new psychological explanation of the origins of loss aversion in which loss aversion emerges from differences in the distribution of gains and losses people experience. In 4 experiments, we tested this proposition by manipulating the range of gains and losses that individuals saw during the process of eliciting their loss aversion. We were able to fi...

  4. Aversive effects of ethanol in adolescent versus adult rats: potential causes and implication for future drinking.

    Science.gov (United States)

    Schramm-Sapyta, Nicole L; DiFeliceantonio, Alexandra G; Foscue, Ethan; Glowacz, Susan; Haseeb, Naadeyah; Wang, Nancy; Zhou, Cathy; Kuhn, Cynthia M

    2010-12-01

    Many people experiment with alcohol and other drugs of abuse during their teenage years. Epidemiological evidence suggests that younger initiates into drug taking are more likely to develop problematic drug seeking behavior, including binge and other high-intake behaviors. The level of drug intake for any individual depends on the balance of rewarding and aversive effects of the drug in that individual. Multiple rodent studies have demonstrated that aversive effects of drugs of abuse are reduced in adolescent compared to adult animals. In this study, we addressed 2 key questions: First, do reduced aversive effects of ethanol in younger rats correlate with increased ethanol consumption? Second, are the reduced aversive effects in adolescents attributable to reduced sensitivity to ethanol's physiologic effects? Adolescent and adult rats were tested for ethanol conditioned taste aversion (CTA) followed by a voluntary drinking period, including postdeprivation consumption. Multivariate regression was used to assess correlations. In separate experiments, adolescent and adult rats were tested for their sensitivity to the hypothermic and sedative effects of ethanol, and for blood ethanol concentrations (BECs). We observed that in adolescent rats but not adults, taste aversion was inversely correlated with postdeprivation consumption. Adolescents also exhibited a greater increase in consumption after deprivation than adults. Furthermore, the age difference in ethanol CTA was not attributable to differences in hypothermia, sedation, or BECs. These results suggest that during adolescence, individuals that are insensitive to aversive effects are most likely to develop problem drinking behaviors. These results underscore the importance of the interaction between developmental stage and individual variation in sensitivity to alcohol. Copyright © 2010 by the Research Society on Alcoholism.

  5. Narrative Aversion: Challenges for the Illness Narrative Advocate.

    Science.gov (United States)

    Behrendt, Kathy

    2017-02-01

    Engaging in self-narrative is often touted as a powerful antidote to the bad effects of illness. However, there are various examples of what may broadly be termed "aversion" to illness narrative. I group these into three kinds: aversion to certain types of illness narrative; aversion to illness narrative as a whole; and aversion to illness narrative as an essentially therapeutic endeavor. These aversions can throw into doubt the advantages claimed for the illness narrator, including the key benefits of repair to the damage illness does to identity and life-trajectory. Underlying these alleged benefits are two key presuppositions: that it is the whole of one's life that is narratively unified, and that one's identity is inextricably bound up with narrative. By letting go of these assumptions, illness narrative advocates can respond to the challenges of narrative aversions. © The Author 2016. Published by Oxford University Press, on behalf of The Journal of Medicine and Philosophy Inc. All rights reserved. For permissions, please e-mail: journals.permissions@oup.com.

  6. Inequality Aversion and Voting on Redistribution

    DEFF Research Database (Denmark)

    Höchtl, Wolfgang; Sausgruber, Rupert; Tyran, Jean-Robert

    of income classes. We experimentally study voting on redistribution between two income classes and show that the effect of inequality aversion is asymmetric. Inequality aversion is more likely to matter if the “rich” are in majority. With a “poor” majority, we find that redistribution outcomes look...

  7. Inequality aversion and voting on redistribution

    DEFF Research Database (Denmark)

    Höchtl, Wolfgang; Sausgruber, Rupert; Tyran, Jean-Robert Karl

    2012-01-01

    of income classes. We experimentally study voting on redistribution between two income classes and show that the effect of inequality aversion is asymmetric. Inequality aversion is more likely to matter if the “rich” are in majority. With a “poor” majority, we find that redistribution outcomes look...

  8. Schizophrenia illness severity is associated with reduced loss aversion.

    Science.gov (United States)

    Currie, James; Buruju, Dheeraj; Perrin, Jennifer S; Reid, Ian C; Steele, J Douglas; Feltovich, Nick

    2017-06-01

    Loss aversion, whereby losses weigh more heavily than equal-sized gains, has been demonstrated in many decision-making settings. Previous research has suggested reduced loss aversion in schizophrenia, but with little evidence of a link between loss aversion and schizophrenia illness severity. In this study, 20 individuals with schizophrenia and 16 control participants, matched by age and sex, played two versions of the Iterated Prisoners' Dilemma, one version with only positive payoffs and another version in which negative payoffs were possible, with the second version being derived from the first by subtracting a constant value from all payoffs. The control group demonstrated significantly lower cooperation rates under negative payoffs, compared with the version with only positive payoffs, indicative of loss aversion. The patient group on average showed no loss aversion response. Moreover, the extent of loss aversion in patients was found to be negatively correlated with schizophrenia illness severity, with less ill patients showing loss aversion more similar to controls. Results were found to be robust to the inclusion of potential confounding factors as covariates within rigorous probit regression analyses. Reduced loss aversion is a feature of schizophrenia and related to illness severity. Copyright © 2017. Published by Elsevier B.V.

  9. Mechanisms of radiation-induced conditioned taste aversion learning

    International Nuclear Information System (INIS)

    Rabin, B.M.; Hunt, W.A.

    1986-01-01

    The literature on taste aversion learning is reviewed and discussed, with particular emphasis on those studies that have used exposure to ionizing radiation as an unconditioned stimulus to produce a conditioned taste aversion. The primary aim of the review is to attempt to define the mechanisms that lead to the initiation of the taste aversion response following exposure to ionizing radiation. Studies using drug treatments to produce a taste aversion have been included to the extent that they are relevant to understanding the mechanisms by which exposure to ionizing radiation can affect the behavior of the organism. 141 references

  10. Acceptable losses: the debatable origins of loss aversion.

    Science.gov (United States)

    Yechiam, Eldad

    2018-04-16

    It is often claimed that negative events carry a larger weight than positive events. Loss aversion is the manifestation of this argument in monetary outcomes. In this review, we examine early studies of the utility function of gains and losses, and in particular the original evidence for loss aversion reported by Kahneman and Tversky (Econometrica  47:263-291, 1979). We suggest that loss aversion proponents have over-interpreted these findings. Specifically, the early studies of utility functions have shown that while very large losses are overweighted, smaller losses are often not. In addition, the findings of some of these studies have been systematically misrepresented to reflect loss aversion, though they did not find it. These findings shed light both on the inability of modern studies to reproduce loss aversion as well as a second literature arguing strongly for it.

  11. Consequences of regret aversion : effects of expected feedback on risky decision making

    NARCIS (Netherlands)

    Zeelenberg, M.; Beattie, J.; Pligt, van der J.; Vries, de N.K.

    1996-01-01

    Previous research has considered the question of how anticipated regret affects risky decision making. Several studies have shown that anticipated regret forces participants towards the safe option, showing risk-aversion. We argue that these results are due to the previous confounding of the

  12. Effects of incorporating environmental cost and risk aversion on economic values of pig breeding goal traits.

    Science.gov (United States)

    Ali, B M; de Mey, Y; Bastiaansen, J W M; Oude Lansink, A G J M

    2018-06-01

    Economic values (EVs) of traits, accounting for environmental impacts and risk preferences of farmers, are required to design breeding goals that contribute to both economic and environmental sustainability. The objective of this study was to assess the effects of incorporating environmental costs and the risk preferences of farmers on the EVs of pig breeding goal traits. A breeding goal consisting of both sow efficiency and production traits was defined for a typical Brazilian farrow-to-finish pig farm with 1,500 productive sows. A mean-variance utility function was employed for deriving the EVs at finishing pig level assuming fixed slaughter weight. The inclusion of risk and risk aversion reduces the economic weights of sow efficiency traits (17%) while increasing the importance of production traits (7%). For a risk-neutral producer, inclusion of environmental cost reduces the economic importance of sow efficiency traits (3%) while increasing the importance of production traits (1%). Genetic changes of breeding goal traits by their genetic standard deviations reduce emissions of greenhouse gases, and excretions of nitrogen and phosphorus per finished pig by up to 6% while increasing farm profit. The estimated EVs could be used to improve selection criteria and thereby contribute to the sustainability of pig production systems. © 2018 The Authors. Journal of Animal Breeding and Genetics published by Blackwell Verlag GmbH.

  13. Clinical responsibility, accountability, and risk aversion in mental health nursing: a descriptive, qualitative study.

    Science.gov (United States)

    Manuel, Jenni; Crowe, Marie

    2014-08-01

    A number of recent, highly-publicized, perceived health-care service failures have raised concerns about health professionals' accountabilities. Relevant to these concerns, the present study sought to examine how mental health nurses understood clinical responsibility and its impact on their practice. A descriptive, qualitative design was used, and a convenience sample of 10 mental health nurses was recruited from specialist inpatient and outpatient mental health settings in Canterbury, New Zealand. Data were collected using semistructured interviews, and the transcriptions were analysed using an inductive, descriptive approach. Three major themes were identified: being accountable, fostering patient responsibility, and shifting responsibility. Being accountable involved weighing up patients' therapeutic needs against the potential for blame in an organizational culture of risk management. Fostering patient responsibility described the process of deciding in what situations patients could take responsibility for their behaviour. Shifting responsibility described the culture of defensive practice fostered by the organizational culture of risk aversion. The present study highlighted the challenges mental health nurses experience in relation to clinical responsibility in practice, including the balancing required between the needs of patients, the needs of the organization, and the perceived need for self-protection. © 2014 Australian College of Mental Health Nurses Inc.

  14. Probabilistic Sophistication, Second Order Stochastic Dominance, and Uncertainty Aversion

    OpenAIRE

    Simone Cerreia-Vioglio; Fabio Maccheroni; Massimo Marinacci; Luigi Montrucchio

    2010-01-01

    We study the interplay of probabilistic sophistication, second order stochastic dominance, and uncertainty aversion, three fundamental notions in choice under uncertainty. In particular, our main result, Theorem 2, characterizes uncertainty averse preferences that satisfy second order stochastic dominance, as well as uncertainty averse preferences that are probabilistically sophisticated.

  15. Coordinating a Supply Chain with a Loss-Averse Retailer and Effort Dependent Demand

    Science.gov (United States)

    Li, Liying

    2014-01-01

    This study investigates the channel coordination issue of a supply chain with a risk-neutral manufacturer and a loss-averse retailer facing stochastic demand that is sensitive to sales effort. Under the loss-averse newsvendor setting, a distribution-free gain/loss-sharing-and-buyback (GLB) contract has been shown to be able to coordinate the supply chain. However, we find that a GLB contract remains ineffective in managing the supply chain when retailer sales efforts influence the demand. To effectively coordinate the channel, we propose to combine a GLB contract with sales rebate and penalty (SRP) contract. In addition, we discover a special class of gain/loss contracts that can coordinate the supply chain and arbitrarily allocate the expected supply chain profit between the manufacturer and the retailer. We then analyze the effect of loss aversion on the retailer's decision-making behavior and supply chain performance. Finally, we perform a numerical study to illustrate the findings and gain additional insights. PMID:25197696

  16. Coordinating a supply chain with a loss-averse retailer and effort dependent demand.

    Science.gov (United States)

    Li, Liying; Wang, Yong

    2014-01-01

    This study investigates the channel coordination issue of a supply chain with a risk-neutral manufacturer and a loss-averse retailer facing stochastic demand that is sensitive to sales effort. Under the loss-averse newsvendor setting, a distribution-free gain/loss-sharing-and-buyback (GLB) contract has been shown to be able to coordinate the supply chain. However, we find that a GLB contract remains ineffective in managing the supply chain when retailer sales efforts influence the demand. To effectively coordinate the channel, we propose to combine a GLB contract with sales rebate and penalty (SRP) contract. In addition, we discover a special class of gain/loss contracts that can coordinate the supply chain and arbitrarily allocate the expected supply chain profit between the manufacturer and the retailer. We then analyze the effect of loss aversion on the retailer's decision-making behavior and supply chain performance. Finally, we perform a numerical study to illustrate the findings and gain additional insights.

  17. Lossed in translation: an off-the-shelf method to recover probablistic beliefs from loss-averse agents

    NARCIS (Netherlands)

    Offerman, T.; Palley, A.B.

    2016-01-01

    Strictly proper scoring rules are designed to truthfully elicit subjective probabilistic beliefs from risk neutral agents. Previous experimental studies have identified two problems with this method: (i) risk aversion causes agents to bias their reports toward the probability of 1/2 , and (ii) for

  18. PRENATAL ETHANOL EXPOSURE LEADS TO GREATER ETHANOL-INDUCED APPETITIVE REINFORCEMENT

    Science.gov (United States)

    Pautassi, Ricardo M.; Nizhnikov, Michael E.; Spear, Norman E.; Molina, Juan C.

    2012-01-01

    Prenatal ethanol significantly heightens later alcohol consumption, but the mechanisms that underlie this phenomenon are poorly understood. Little is known about the basis of this effect of prenatal ethanol on the sensitivity to ethanol’s reinforcing effects. One possibility is that prenatal ethanol exposure makes subjects more sensitive to the appetitive effects of ethanol or less sensitive to ethanol’s aversive consequences. The present study assessed ethanol-induced second-order conditioned place preference (CPP) and aversion and ethanol-induced conditioned taste aversion (CTA) in infant rats prenatally exposed to ethanol (2.0 g/kg) or vehicle (water) or left untreated. The involvement of the κ opioid receptor system in ethanol-induced CTA was also explored. When place conditioning occurred during the ascending limb of the blood-ethanol curve (Experiment 1), the pups exposed to ethanol in utero exhibited greater CPP than untreated controls, with a shift to the right of the dose-response curve. Conditioning during a later phase of intoxication (30–45 min post-administration; Experiment 2) resulted in place aversion in control pups exposed to vehicle during late gestation but not in pups that were exposed to ethanol in utero. Ethanol induced a reliable and similar CTA (Experiment 3) in the pups treated with vehicle or ethanol during gestation, and CTA was insensitive to κ antagonism. These results suggest that brief exposure to a moderate ethanol dose during late gestation promotes ethanol-mediated reinforcement and alters the expression of conditioned aversion by ethanol. This shift in the motivational reactivity to ethanol may be an underlying basis of the effect of prenatal ethanol on later ethanol acceptance. PMID:22698870

  19. Effect of sex on ethanol consumption and conditioned taste aversion in adolescent and adult rats.

    Science.gov (United States)

    Schramm-Sapyta, Nicole L; Francis, Reynold; MacDonald, Andrea; Keistler, Colby; O'Neill, Lauren; Kuhn, Cynthia M

    2014-04-01

    Vulnerability to alcoholism is determined by many factors, including the balance of pleasurable vs. aversive alcohol-induced sensations: pleasurable sensations increase intake, while aversive sensations decrease it. Female sex and adolescent age are associated with lower sensitivity to intake-reducing effects and more rapid development of alcohol abuse. This study assessed voluntary drinking and the aversive effects of alcohol to determine whether these measures are inversely related across the sexes and development. Voluntary drinking of 20 % ethanol in an every-other-day (EOD) availability pattern and the dose-response relationship of ethanol conditioned taste aversion (CTA) were assessed in male and female adolescent and adult rats. CTA was sex specific in adult but not adolescent rats, with adult females exhibiting less aversion. Voluntary ethanol consumption varied according to age and individual differences but was not sex specific. Adolescents initially drank more than adults, exhibited greater day-to-day variation in consumption, were more susceptible to the alcohol deprivation effect, and took longer to establish individual differences in consumption patterns. These results show that the emergence of intake patterns differs between adolescents and adults. Adolescents as a group initiate drinking at high levels but decrease intake as they mature. A subset of adolescents maintained high drinking levels into adulthood. In contrast, most adults consumed at steady, low levels, but a small subset quickly established and maintained high-consumption patterns. Adolescents also showed marked deprivation-induced increases. Sex differences were not observed in EOD drinking during either adolescence or adulthood.

  20. Does a too risk-averse approach to the implementation of new radiotherapy technologies delay their clinical use?

    Science.gov (United States)

    Garcia, R; Nyström, H; Fiorino, C; Thwaites, D

    2015-07-01

    Radiotherapy is a generally safe treatment modality in practice; nevertheless, recent well-reported accidents also confirm its potential risks. However, this may obstruct or delay the introduction of new technologies and treatment strategies/techniques into clinical practice. Risks must be addressed and judged in a realistic context: risks must be assessed realistically. Introducing new technology may introduce new possibilities of errors. However, delaying the introduction of such new technology therefore means that patients are denied the potentially better treatment opportunities. Despite the difficulty in quantitatively assessing the risks on both sides of the possible choice of actions, including the "lost opportunity", the best estimates should be included in the overall risk-benefit and cost-benefit analysis. Radiotherapy requires a sufficiently high level of support for the safety, precision and accuracy required: radiotherapy development and implementation is exciting. However, it has been anxious with a constant awareness of the consequences of mistakes or misunderstandings. Recent history can be used to show that for introduction of advanced radiotherapy, the risk-averse medical physicist can act as an electrical fuse in a complex circuit. The lack of sufficient medical physics resource or expertise can short out this fuse and leave systems unsafe. Future technological developments will continue to present further safety and risk challenges. The important evolution of radiotherapy brings different management opinions and strategies. Advanced radiotherapy technologies can and should be safely implemented in as timely a manner as possible for the patient groups where clinical benefit is indicated.

  1. Sodium butyrate into the insular cortex during conditioned taste-aversion acquisition delays aversive taste memory extinction.

    Science.gov (United States)

    Núñez-Jaramillo, Luis; Reyes-López, Julian; Miranda, María Isabel

    2014-04-16

    Histone acetylation is one mechanism that promotes gene expression, and it increases during learning of various tasks. Specifically, novel taste consumption produces an increased acetylation of histone lysine residues in the insular cortex (IC), where protein synthesis is crucial during memory consolidation of conditioned taste aversion (CTA). However, the role of this elevated histone acetylation during CTA learning has not been examined directly. Thus, the present study investigated the effects of sodium butyrate (NaBu), a histone deacetylase inhibitor, injected into the IC during CTA acquisition. Male Wistar rats, IC bilaterally implanted, were injected 60 min before saccharine presentation, with a total volume of 0.5 µl of NaBu solution (100, 500, and 10 µg/0.5 µl) or saline; 30 min later animals were injected intraperitoneally with lithium chloride, a malaise-inducing drug. The next day, CTA retrieval was tested. No effects of NaBu were observed during acquisition or retrieval, but during extinction trials, a significant delay in aversive memory extinction was observed in the group injected with the lowest NaBu dose. This result indicates that NaBu in the IC strengthens CTA and delays aversive memory extinction, and suggests that histone acetylation could increase long-term taste-aversive memory strength.

  2. Risk and risk aversion in our society

    Energy Technology Data Exchange (ETDEWEB)

    Cohen, B L [Pittsburgh Univ., PA (USA)

    1985-01-01

    The best way to understand the magnitude of a risk is to compare it with other risks with which we are familiar, and a convenient way of doing this is to compare risks on the basis of Loss of Life Expectancy, LLE, that they cause. The LLE due to various risks including energy generation is listed. The cost of programs to save lives by medical screening, highway safety and other methods is summarised. The public's perception of radiation risks is grossly exaggerated relative to other risks.

  3. Risk and risk aversion in our society

    International Nuclear Information System (INIS)

    Cohen, B.L.

    1985-01-01

    The best way to understand the magnitude of a risk is to compare it with other risks which we are familiar, and a convenient way of doing this is to compare risks on the basis of Loss of Life Expectancy, LLE, that they cause. The LLE due to various risks including energy generation is listed. The cost of programs to save lives by medical screening, highway safety and other methods is summarised. The public's perception of radiation risks is grossly exaggerated relative to other risks

  4. The Loss Aversion / Narrow Framing Approach to the Equity Premium Puzzle

    OpenAIRE

    Nicholas Barberis; Ming Huang

    2006-01-01

    We review a recent approach to understanding the equity premium puzzle. The key elements of this approach are loss aversion and narrow framing, two well-known features of decision-making under risk in experimental settings. In equilibrium, models that incorporate these ideas can generate a large equity premium and a low and stable risk-free rate, even when consumption growth is smooth and only weakly correlated with the stock market. Moreover, they can do so for parameter values that correspo...

  5. Ambiguity aversion and household portfolio choice puzzles: Empirical evidence*

    Science.gov (United States)

    Dimmock, Stephen G.; Kouwenberg, Roy; Mitchell, Olivia S.; Peijnenburg, Kim

    2017-01-01

    We test the relation between ambiguity aversion and five household portfolio choice puzzles: nonparticipation in equities, low allocations to equity, home-bias, own-company stock ownership, and portfolio under-diversification. In a representative US household survey, we measure ambiguity preferences using custom-designed questions based on Ellsberg urns. As theory predicts, ambiguity aversion is negatively associated with stock market participation, the fraction of financial assets in stocks, and foreign stock ownership, but it is positively related to own-company stock ownership. Conditional on stock ownership, ambiguity aversion is related to portfolio under-diversification, and during the financial crisis, ambiguity-averse respondents were more likely to sell stocks. PMID:28458446

  6. Ambiguity aversion and household portfolio choice puzzles: Empirical evidence.

    Science.gov (United States)

    Dimmock, Stephen G; Kouwenberg, Roy; Mitchell, Olivia S; Peijnenburg, Kim

    2016-03-01

    We test the relation between ambiguity aversion and five household portfolio choice puzzles: nonparticipation in equities, low allocations to equity, home-bias, own-company stock ownership, and portfolio under-diversification. In a representative US household survey, we measure ambiguity preferences using custom-designed questions based on Ellsberg urns. As theory predicts, ambiguity aversion is negatively associated with stock market participation, the fraction of financial assets in stocks, and foreign stock ownership, but it is positively related to own-company stock ownership. Conditional on stock ownership, ambiguity aversion is related to portfolio under-diversification, and during the financial crisis, ambiguity-averse respondents were more likely to sell stocks.

  7. A Moist Crevice for Word Aversion: In Semantics Not Sounds.

    Directory of Open Access Journals (Sweden)

    Paul H Thibodeau

    Full Text Available Why do people self-report an aversion to words like "moist"? The present studies represent an initial scientific exploration into the phenomenon of word aversion by investigating its prevalence and cause. Results of five experiments indicate that about 10-20% of the population is averse to the word "moist." This population often speculates that phonological properties of the word are the cause of their displeasure. However, data from the current studies point to semantic features of the word-namely, associations with disgusting bodily functions-as a more prominent source of peoples' unpleasant experience. "Moist," for averse participants, was notable for its valence and personal use, rather than imagery or arousal-a finding that was confirmed by an experiment designed to induce an aversion to the word. Analyses of individual difference measures suggest that word aversion is more prevalent among younger, more educated, and more neurotic people, and is more commonly reported by females than males.

  8. Risk attitudes and personality traits predict perceptions of benefits and risks for medicinal products: a field study of European medical assessors.

    Science.gov (United States)

    Beyer, Andrea R; Fasolo, Barbara; de Graeff, P A; Hillege, H L

    2015-01-01

    Risk attitudes and personality traits are known predictors of decision making among laypersons, but very little is known of their influence among experts participating in organizational decision making. Seventy-five European medical assessors were assessed in a field study using the Domain Specific Risk Taking scale and the Big Five Inventory scale. Assessors rated the risks and benefits for a mock "clinical dossier" specific to their area of expertise, and ordinal regression models were used to assess the odds of risk attitude or personality traits in predicting either the benefit or the risk ratings. An increase in the "conscientiousness" score predicted an increase in the perception of the drug's benefit, and male assessors gave higher scores for the drug's benefit ratings than did female assessors. Extraverted assessors saw fewer risks, and assessors with a perceived neutral-averse or averse risk profile saw greater risks. Medical assessors perceive the benefits and risks of medicines via a complex interplay of the medical situation, their personality traits and even their gender. Further research in this area is needed to determine how these potential biases are managed within the regulatory setting. Copyright © 2015 International Society for Pharmacoeconomics and Outcomes Research (ISPOR). Published by Elsevier Inc. All rights reserved.

  9. Ambiguity and risk measures in the lab and students’ real-life borrowing behavior

    NARCIS (Netherlands)

    Fairley, Kim; Weitzel, Utz

    This study analyzes the external validity of experimentally elicited ambiguity aversion, likelihood insensitivity and risk aversion on real-life decision-making in the field of student loans. Our main finding is that ambiguity aversion, likelihood insensitivity and risk aversion are not related to

  10. Self-Other Decision Making and Loss Aversion

    Science.gov (United States)

    Polman, Evan

    2012-01-01

    In eight studies, we tested the prediction that making choices for others involves less loss aversion than making choices for the self. We found that loss aversion is significantly lessened among people choosing for others in scenarios describing riskless choice (Study 1), gambling (Studies 2 and 3), and social aspects of life, such as likeably…

  11. Aversive smell associations shape social judgment

    OpenAIRE

    Homan, Philipp; Ely, Benjamin A.; Yuan, May; Brosch, Tobias; Ng, John; Trope, Yaacov; Schiller, Daniela

    2017-01-01

    Once associating another person with an unpleasant smell, how do we perceive and judge this person from that moment on? Here, we used aversive olfactory conditioning followed by a social attribution task during functional magnetic resonance imaging to address this question. After conditioning, where one of two faces was repeatedly paired with an aversive smell, the participants reported negative affect when viewing the smell-conditioned but not the neutral face. When subsequently confronted w...

  12. Memory reconsolidation in aversive and appetitive settings

    Directory of Open Access Journals (Sweden)

    Amy Claire Reichelt

    2013-09-01

    Full Text Available Memory reconsolidation has been observed across species and in a number of behavioural paradigms. The majority of memory reconsolidation studies have been carried out in pavlovian fear conditioning and other aversive memory settings, with potential implications for the treatment of post-traumatic stress disorder. However, there is a growing literature on memory reconsolidation in appetitive reward-related memory paradigms, including translational models of drug addiction. While there appears to be substantial similarity in the basic phenomenon and underlying mechanisms of memory reconsolidation across unconditioned stimulus valence, there are also notable discrepancies. These arise both when comparing aversive to appetitive paradigms and also across different paradigms within the same valence of memory. We review the demonstration of memory reconsolidation across different aversive and appetitive memory paradigms, the commonalities and differences in underlying mechanisms and the conditions under which each memory undergoes reconsolidation. We focus particularly on whether principles derived from the aversive literature are applicable to appetitive settings, and also whether the expanding literature in appetitive paradigms is informative for fear memory reconsolidation.

  13. Complexity and competition in appetitive and aversive neural circuits

    Directory of Open Access Journals (Sweden)

    Crista L. Barberini

    2012-11-01

    Full Text Available Decision-making often involves using sensory cues to predict possible rewarding or punishing reinforcement outcomes before selecting a course of action. Recent work has revealed complexity in how the brain learns to predict rewards and punishments. Analysis of neural signaling during and after learning in the amygdala and orbitofrontal cortex, two brain areas that process appetitive and aversive stimuli, reveals a dynamic relationship between appetitive and aversive circuits. Specifically, the relationship between signaling in appetitive and aversive circuits in these areas shifts as a function of learning. Furthermore, although appetitive and aversive circuits may often drive opposite behaviors – approaching or avoiding reinforcement depending upon its valence – these circuits can also drive similar behaviors, such as enhanced arousal or attention; these processes also may influence choice behavior. These data highlight the formidable challenges ahead in dissecting how appetitive and aversive neural circuits interact to produce a complex and nuanced range of behaviors.

  14. Rats and seabirds: effects of egg size on predation risk and the potential of conditioned taste aversion as a mitigation method.

    Science.gov (United States)

    Latorre, Lucía; Larrinaga, Asier R; Santamaría, Luis

    2013-01-01

    Seabirds nesting on islands are threatened by invasive rodents, such as mice and rats, which may attack eggs, chicks and even adults. The low feasibility of rat eradications on many islands makes the development of alternate control plans necessary. We used a combination of field experiments on a Mediterranean island invaded by black rats (Rattusrattus) to evaluate (1) the predation risk posed to different-sized seabird eggs and (2), the potential of two deterrent methods (electronic and chemical) to reduce its impact. Rats were able to consume eggs of all sizes (12 to 68 g), but survival increased 13 times from the smallest to the largest eggs (which also had more resistant eggshells). Extrapolation to seabird eggs suggests that the smallest species (Hydrobatespelagicus) suffer the most severe predation risk, but even the largest (Larusmichahellis) could suffer >60% mortality. Nest attack was not reduced by the deterrents. However, chemical deterrence (conditioned taste aversion by lithium chloride) slowed the increase in predation rate over time, which resulted in a three-fold increase in egg survival to predation as compared to both control and electronic deterrence. At the end of the experimental period, this effect was confirmed by a treatment swap, which showed that conferred protection remains at least 15 days after cessation of the treatment. Results indicate that small seabird species are likely to suffer severe rates of nest predation by rats and that conditioned taste aversion, but not electronic repellents, may represent a suitable method to protect colonies when eradication or control is not feasible or cost-effective.

  15. Thinking like a trader selectively reduces individuals' loss aversion.

    Science.gov (United States)

    Sokol-Hessner, Peter; Hsu, Ming; Curley, Nina G; Delgado, Mauricio R; Camerer, Colin F; Phelps, Elizabeth A

    2009-03-31

    Research on emotion regulation has focused upon observers' ability to regulate their emotional reaction to stimuli such as affective pictures, but many other aspects of our affective experience are also potentially amenable to intentional cognitive regulation. In the domain of decision-making, recent work has demonstrated a role for emotions in choice, although such work has generally remained agnostic about the specific role of emotion. Combining psychologically-derived cognitive strategies, physiological measurements of arousal, and an economic model of behavior, this study examined changes in choices (specifically, loss aversion) and physiological correlates of behavior as the result of an intentional cognitive regulation strategy. Participants were on average more aroused per dollar to losses relative to gains, as measured with skin conductance response, and the difference in arousal to losses versus gains correlated with behavioral loss aversion across subjects. These results suggest a specific role for arousal responses in loss aversion. Most importantly, the intentional cognitive regulation strategy, which emphasized "perspective-taking," uniquely reduced both behavioral loss aversion and arousal to losses relative to gains, largely by influencing arousal to losses. Our results confirm previous research demonstrating loss aversion while providing new evidence characterizing individual differences and arousal correlates and illustrating the effectiveness of intentional regulation strategies in reducing loss aversion both behaviorally and physiologically.

  16. Risk, Balanced Skills and Entrepreneurship

    NARCIS (Netherlands)

    Hsieh, C.; Parker, S.C.; van Praag, C.M.

    2016-01-01

    This paper proposes that risk aversion encourages individuals to invest in balanced skill profiles, making them more likely to become entrepreneurs. By not taking this possible linkage into account, previous research has underestimated the impacts of both risk aversion and balanced skills on the

  17. Trader characteristics and fundamental value trajectories in an asset market experiment

    NARCIS (Netherlands)

    Breaban, Adriana; Noussair, Charles

    2015-01-01

    We report results from an asset market experiment, in which we investigate the relationship between traders’ risk aversion, loss aversion, and cognitive ability and their trading behavior and market outcomes. Greater average risk aversion on the part of traders in the market predicts lower market

  18. Does ambiguity aversion survive in experimental asset markets?

    NARCIS (Netherlands)

    Füllbrunn, Sascha; Rau, Holger A.; Weitzel, Utz

    2014-01-01

    Although a number of theoretical studies explain empirical puzzles in finance with ambiguity aversion, it is not a given that individual ambiguity attitudes survive in markets. In fact, despite ample evidence of ambiguity aversion in individual decision making, most studies find no or only limited

  19. Inequity aversion revisted

    NARCIS (Netherlands)

    Yang, Y.; Onderstal, S.; Schram, A.

    2012-01-01

    We provide the first systematic study of the robustness of parameter estimates for the Fehr-Schmidt (1999) model of inequity aversion with respect to (i) the occurrence of efficiency concerns; (ii) the scale of payoffs; and (iii) the game used (i.e., cross-game consistency). Moreover, we provide

  20. Narp regulates long-term aversive effects of morphine withdrawal

    Science.gov (United States)

    Reti, Irving M.; Crombag, Hans S.; Takamiya, Kogo; Sutton, Jeffrey M.; Guo, Ning; Dinenna, Megan L.; Huganir, Richard L.; Holland, Peter C.; Baraban, Jay M.

    2008-01-01

    Although long-lasting effects of drug withdrawal are thought to play a key role in motivating continued drug use, the mechanisms mediating this type of drug-induced plasticity are unclear. As Narp is an immediate early gene product that is secreted at synaptic sites and binds to AMPA receptors, it has been implicated in mediating enduring forms of synaptic plasticity. In previous studies, we found that Narp is selectively induced by morphine withdrawal in the extended amygdala, a group of limbic nuclei that mediate aversive behavioral responses. Accordingly, in this study, we evaluated whether long-term aversive effects of morphine withdrawal are altered in Narp KO mice. We found that acute physical signs of morphine withdrawal are unaffected by Narp deletion. However, Narp KO mice acquire and sustain more aversive responses to the environment conditioned with morphine withdrawal than WT controls. Paradoxically, Narp KO mice undergo accelerated extinction of this heightened aversive response. Taken together, these studies suggest that Narp modulates both acquisition and extinction of aversive responses to morphine withdrawal and, therefore, may regulate plasticity processes underlying drug addiction. PMID:18729628

  1. Myopic loss aversion: Potential causes of replication failures

    Directory of Open Access Journals (Sweden)

    Alexander Klos

    2013-09-01

    Full Text Available This paper presents two studies on narrow bracketing and myopic loss aversion. The first study shows that the tendency to segregate multiple gambles is eliminated if subjects face a certainty equivalent or a probability equivalent task instead of a binary choice. The second study argues that the behavioral differences previously attributed entirely to myopic loss aversion are partly because long-term return properties are simply easier to grasp if the return information is already provided in the form of long-term returns rather than one-year returns. Both results may be related to recent failures to replicate myopic loss aversion. When the choice situation is structured in such a way that it draws respondents' attention to the final outcome distribution and/or if severe misestimations of long-term returns based on short-term return information are unlikely, behavioral differences consistent with myopic loss aversion are less likely to be observed.

  2. Further evidence for conditioned taste aversion induced by forced swimming.

    Science.gov (United States)

    Masaki, Takahisa; Nakajima, Sadahiko

    2005-01-31

    A series of experiments with rats reported that aversion to a taste solution can be established by forced swimming in a water pool. Experiment 1 demonstrated that correlation of taste and swimming is a critical factor for this phenomenon, indicating associative (i.e., Pavlovian) nature of this learning. Experiment 2 showed that this learning obeys the Pavlovian law of strength, by displaying a positive relationship between the duration of water immersion in training and the taste aversion observed in subsequent testing. Experiment 3 revealed that swimming rather than being wet is the critical agent, because a water shower did not endow rats with taste aversion. Experiment 4 found that taste aversion was a positive function of water level of the pools in training (0, 12 or 32 cm). These results, taken together, suggest that energy expenditure caused by physical exercise might be involved in the development of taste aversion.

  3. Behavioural feedback to risk variation ensues from unsatisfied appetency.

    Science.gov (United States)

    Dussault, C

    1996-07-01

    For a long time, but particularly since the last two decades, the phenomenon of behavioural feedback to risk variation, especially to highway safety measures, has been the subject of numerous papers and debates. It has been advanced that human behaviour ensues from the interaction between two motivational systems: (1) appetency, governed by a homeostasic mechanism, wherein the individual seeks to satisfy needs, and (2) aversion, guided by the principle of zero aversion, whereby the individual seeks to avoid aversive stimuli. When an individual considers the possibility of undertaking an action, he weighs the advantages (appetency) and the disavantages (aversion). If the appetency proves to be stronger than the aversion, the action is completed and ipso facto, the individual accepts the risk associated with it. In this article, it is suggested that the behavioural feedback following a variation in the risk (aversion) ensues from unsatisfied appetency. If the unsatisfied appetency is nil (the individual is already satisfied), a drop in the aversive constraint (e.g. lowered risk of an accident) will not cause any behavioural feedback. On the other hand, if there is an unsatisfied appetency (the individual is not fully satisfied), a drop in the aversive constraint will bring about behavioural feedback in proportion to the level of unsatisfied appetency. Cases in which behavioural feedback is likely to arise and the implications for public policy-making are briefly discussed.

  4. Anxiety and spatial attention moderate the electrocortical response to aversive pictures.

    Science.gov (United States)

    MacNamara, Annmarie; Hajcak, Greg

    2009-11-01

    Aversive stimuli capture attention and elicit increased neural activity, as indexed by behavioral, electrocortical and hemodynamic measures; moreover, individual differences in anxiety relate to a further increased sensitivity to threatening stimuli. Evidence has been mixed, however, as to whether aversive pictures elicit increased neural response when presented in unattended spatial locations. In the current study, ERP and behavioral data were recorded from 49 participants as aversive and neutral pictures were simultaneously presented in spatially attended and unattended locations; on each trial, participants made same/different judgments about pictures presented in attended locations. Aversive images presented in unattended locations resulted in increased error rate and reaction time. The late positive potential (LPP) component of the ERP was only larger when aversive images were presented in attended locations, and this increase was positively correlated with self-reported state anxiety. Findings are discussed in regard to the sensitivity of ERP and behavioral responses to aversive distracters, and in terms of increased neural processing of threatening stimuli in anxiety.

  5. Sudden-Death Aversion: Avoiding Superior Options Because They Feel Riskier.

    Science.gov (United States)

    Walker, Jesse; Risen, Jane L; Gilovich, Thomas; Thaler, Richard

    2018-01-15

    We present evidence of sudden-death aversion (SDA)-the tendency to avoid "fast" strategies that provide a greater chance of success, but include the possibility of immediate defeat, in favor of "slow" strategies that reduce the possibility of losing quickly, but have lower odds of ultimate success. Using a combination of archival analyses and controlled experiments, we explore the psychology behind SDA. First, we provide evidence for SDA and its cost to decision makers by tabulating how often NFL teams send games into overtime by kicking an extra point rather than going for the 2-point conversion (Study 1) and how often NBA teams attempt potentially game-tying 2-point shots rather than potentially game-winning 3-pointers (Study 2). To confirm that SDA is not limited to sports, we demonstrate SDA in a military scenario (Study 3). We then explore two mechanisms that contribute to SDA: myopic loss aversion and concerns about "tempting fate." Studies 4 and 5 show that SDA is due, in part, to myopic loss aversion, such that decision makers narrow the decision frame, paying attention to the prospect of immediate loss with the "fast" strategy, but not the downstream consequences of the "slow" strategy. Study 6 finds that people are more pessimistic about a risky strategy that needn't be pursued (opting for sudden death) than the same strategy that must be pursued. We end by discussing how these twin mechanisms lead to differential expectations of blame from the self and others, and how SDA influences decisions in several different walks of life. (PsycINFO Database Record (c) 2018 APA, all rights reserved).

  6. RELATIONSHIP BETWEEN THE TASK AVERSIVENESS AND ACADEMIC PROCRASTINATION

    Directory of Open Access Journals (Sweden)

    Magvirasari Lestari Linra

    2016-12-01

    Full Text Available Academic procrastination occurs when certain tasks are considered unpleasant, an unpleasant task and the usual delayed them is the task of writing, reading, studying for the exam, meetings, and administrative. The purpose of this study was to determine the relationship of the task aversiveness with academic procrastination. Subject of the study were 100 students out of a population of 516 students of the Faculty of Psychology class of 2012-2014. The method used in this research is quantitative by using Spearman rho as data analysis techniques. The research instrument consists of academic procrastination scale and the scale of the task aversiveness. Based on the results of correlation is known that there is a positive relationship between task aversiveness with academic procrastination with a correlation coefficient r = 0.508; p = 0.000. The results showed that of the 100 students of the Faculty of Psychology University of Makassar has a degree of relationship between task aversiveness with academic procrastination is on the very low category (25, 8%. Area / types of tasks delayed is not necessarily an unpleasant task and otherwise unpleasant task may not be postponed. Area task the highest level of aversive and delays are areas the task of writing and reading. This study illustrates that academic procrastination can be lowered by a change in the mindset of an unpleasant task.

  7. Are group members less inequality averse than individual decision makers?

    OpenAIRE

    He, Haoran; Villeval, Marie Claire

    2017-01-01

    International audience; We compare inequality aversion in individuals and teams by means of both within- and between-subject experimental designs, and we investigate how teams aggregate individual preferences. We find that team decisions reveal less inequality aversion than individual initial proposals in team decision-making. However, teams are no more selfish than individuals who decide in isolation. Individuals express strategically more inequality aversion in their initial proposals in te...

  8. POSTTRAUMATIC STRESS SYMPTOMS AND AVERSION TO AMBIGUOUS LOSSES IN COMBAT VETERANS.

    Science.gov (United States)

    Ruderman, Lital; Ehrlich, Daniel B; Roy, Alicia; Pietrzak, Robert H; Harpaz-Rotem, Ilan; Levy, Ifat

    2016-07-01

    Psychiatric symptoms typically cut across traditional diagnostic categories. In order to devise individually tailored treatments, there is a need to identify the basic mechanisms that underlie these symptoms. Behavioral economics provides a framework for studying these mechanisms at the behavioral level. Here, we utilized this framework to examine a widely ignored aspect of trauma-related symptomatology-individual uncertainty attitudes-in combat veterans with and without posttraumatic stress disorder (PTSD). Fifty-seven combat veterans, including 30 with PTSD and 27 without PTSD, completed a risk and ambiguity decision-making task that characterizes individual uncertainty attitudes, distinguishing between attitudes toward uncertain outcomes with known ("risk") and unknown ("ambiguity") probabilities, and between attitudes toward uncertain gains and uncertain losses. Participants' choices were used to estimate risk and ambiguity attitudes in the gain and loss domains. Veterans with PTSD were more averse to ambiguity, but not risk, compared to veterans without PTSD, when making choices between possible losses, but not gains. The degree of aversion was associated with anxious arousal (e.g., hypervigilance) symptoms, as well as with the degree of combat exposure. Moreover, ambiguity attitudes fully mediated the association between combat exposure and anxious arousal symptoms. These results provide a foundation for prospective studies of the causal association between ambiguity attitudes and trauma-related symptoms, as well as etiologic studies of the neural underpinnings of these behavioral outcomes. More generally, these results demonstrate the potential of neuroeconomic and behavioral economic techniques for devising objective and incentive-compatible diagnostic tools, and investigating the etiology of psychiatric disorders. © 2016 Wiley Periodicals, Inc.

  9. Toxoplasma gondii influences aversive behaviors of female rats in an estrus cycle dependent manner.

    Science.gov (United States)

    Golcu, Doruk; Gebre, Rahiwa Z; Sapolsky, Robert M

    2014-08-01

    The protozoan Toxoplasma gondii (T. gondii) manipulates the behavior of its rodent intermediate host to facilitate its passage to its feline definitive host. This is accomplished by a reduction of the aversive response that rodents show towards cat odors, which likely increases the predation risk. Females on average show similar changes as males. However, behaviors that relate to aversion and attraction are usually strongly influenced by the estrus cycle. In this study, we replicated behavioral effects of T. gondii in female rats, as well as expanded it to two novel behavioral paradigms. We also characterized the role of the estrus cycle in the behavioral effects of T. gondii on female rats. Uninfected females preferred to spend more time in proximity to rabbit rather than bobcat urine, and in a dark chamber rather than a lit chamber. Infected females lost both of these preferences, and also spent more time investigating social novelty (foreign bedding in their environment). Taken together, these data suggest that infection makes females less risk averse and more exploratory. Furthermore, this effect was influenced by the estrus cycle. Uninfected rats preferred rabbit urine to bobcat urine throughout the cycle except at estrus and metestrus. In contrast, infected rats lost this preference at every stage of the cycle except estrus. Commensurate with the possibility that this was a hormone-dependent effect, infected rats had elevated levels of circulating progesterone, a known anxiolytic. Copyright © 2014 Elsevier Inc. All rights reserved.

  10. Risk-averse portfolio selection of renewable electricity generator investments in Brazil: An optimised multi-market commercialisation strategy

    International Nuclear Information System (INIS)

    Maier, Sebastian; Street, Alexandre; McKinnon, Ken

    2016-01-01

    Investment decisions in renewable energy sources such as small hydro, wind power, biomass and solar are frequently made in the context of enormous uncertainty surrounding both intermittent generation and the highly volatile electricity spot prices that are used for clearing of trades. This paper presents a new portfolio-based approach for selecting long-term investments in small-scale renewable energy projects and matching contracts for the sale of the resulting electricity. Using this approach, we have formulated a stochastic optimisation model that maximises a holding company's risk-averse measure of value. Using an illustrative example representative of investment decisions within the Brazilian electricity system, we investigate the sensitivity of the optimised portfolio composition and commercialisation strategy to contract prices in the free contracting environment and to the decision maker's attitude towards risk. The numerical results demonstrate it is possible to reduce significantly financial risks, such as the price-quantity risk, not only by exploiting the complementarity of the considered renewable sources generation profiles, but also by selecting the optimal mix of commercialisation contracts from different markets. We find that the multi-market strategy generally results in appreciably higher optimal value than single-market strategies and can be applied to a wide range of renewable generators and contracts. - Highlights: • Gives a portfolio-based multi-market, multi-asset approach to renewable investment. • Details how to model currently used contract types in each of the Brazilian markets. • Presents a test case using realistic contract and real renewable data from Brazil. • Shows that the approach controls financial risks and boosts optimal values. • Explains how relative contract prices and attitude to risk affect optimal decisions.

  11. Are team members less inequality averse than individual decision makers?

    OpenAIRE

    Haoran He; Marie Claire Villeval

    2014-01-01

    révision Août 2015; We compare inequality aversion in individuals and teams by means of both within- and between-subject experimental designs, and we investigate how teams aggregate individual preferences. We find that team decisions reveal less inequality aversion than individual initial proposals in team decision-making. However, teams are no more selfish than individuals who decide in isolation. Individuals express strategically more inequality aversion in their initial proposals in team d...

  12. Common brain activations for painful and non-painful aversive stimuli

    Directory of Open Access Journals (Sweden)

    Hayes Dave J

    2012-06-01

    Full Text Available Abstract Background Identification of potentially harmful stimuli is necessary for the well-being and self-preservation of all organisms. However, the neural substrates involved in the processing of aversive stimuli are not well understood. For instance, painful and non-painful aversive stimuli are largely thought to activate different neural networks. However, it is presently unclear whether there is a common aversion-related network of brain regions responsible for the basic processing of aversive stimuli. To help clarify this issue, this report used a cross-species translational approach in humans (i.e. meta-analysis and rodents (i.e. systematic review of functional neuroanatomy. Results Animal and human data combined to show a core aversion-related network, consisting of similar cortical (i.e. MCC, PCC, AI, DMPFC, RTG, SMA, VLOFC; see results section or abbreviation section for full names and subcortical (i.e. Amyg, BNST, DS, Hab, Hipp/Parahipp, Hyp, NAc, NTS, PAG, PBN, raphe, septal nuclei, Thal, LC, midbrain regions. In addition, a number of regions appeared to be more involved in pain-related (e.g. sensory cortex or non-pain-related (e.g. amygdala aversive processing. Conclusions This investigation suggests that aversive processing, at the most basic level, relies on similar neural substrates, and that differential responses may be due, in part, to the recruitment of additional structures as well as the spatio-temporal dynamic activity of the network. This network perspective may provide a clearer understanding of why components of this circuit appear dysfunctional in some psychiatric and pain-related disorders.

  13. Risk, Balanced Skills and Entrepreneurship

    DEFF Research Database (Denmark)

    Hsieh, Chihmao; Parker, Simon C.; Van Praag, Mirjam

    2017-01-01

    This paper proposes that risk aversionencourages individuals to invest in balanced skillprofiles, making them more likely to become entrepreneurs.By not taking this possible linkage intoaccount, previous research has underestimated theimpacts of both risk aversion and balanced skills onthe...... likelihood individuals choose entrepreneurship.Data on Dutch university graduates provide an illustrationsupporting our contention. We raise thepossibility that even risk-averse people might besuited to entrepreneurship; and it may also help...

  14. Dine or dash? Turbulence inhibits blue crab navigation in attractive-aversive odor plumes by altering signal structure encoded by the olfactory pathway.

    Science.gov (United States)

    Weissburg, Marc; Atkins, Lorin; Berkenkamp, Kimberly; Mankin, Danielle

    2012-12-01

    Blue crabs can distinguish and navigate to attractive (food) odors even when aversive odors (injured crab metabolites) are released nearby. Blue crabs in these conditions detect the aversive odor and avoid it, but find the attractive source with nearly the same success rate as when the attractive source is presented alone. Spatially and temporally distinct odor filaments appear to signal to foragers that the two odor sources are not co-located, and hence navigating to the attractive odor entails an acceptable risk of predation. However, environmentally produced turbulence suppresses tracking by homogenizing the two odors; blue crabs fail to track to the attractive source when the aversive source is present, even though turbulence does not substantially inhibit tracking to the attractive source alone. Removal of sensory input from aesthetascs on the antennules, but not chemosensors on the legs, rescues navigation to attractive-aversive dual plumes in turbulent conditions. These results suggest that mixing in the natural environment may amplify the effects of predators by suppressing tracking to food odors when aversive cues are present, and that the olfactory pathway mediates the response.

  15. Loss Aversion under Prospect Theory: a Parameter-Free Measurement

    NARCIS (Netherlands)

    H. Bleichrodt (Han); M. Abdellaoui (Mohammed); C. Paraschiv (Corina)

    2007-01-01

    textabstractA growing body of qualitative evidence shows that loss aversion, a phenomenon formalized in prospect theory, can explain a variety of field and experimental data. Quantifications of loss aversion are, however, hindered by the absence of a general preference-based method to elicit the

  16. Lossed in Translation: An Off-the-Shelf Method to Recover Probabilistic Beliefs from Loss-Averse Agents

    NARCIS (Netherlands)

    Offerman, T.; Palley, A.

    2013-01-01

    Although strictly proper rules are designed to truthfully elicit subjective probabilistic beliefs, experimental results have shown that risk aversion causes agents to bias their reports towards the rule's baseline probability of 1/2, and a conservative preference for certain outcomes leads agents

  17. Aversive counterconditioning attenuates reward signalling in the ventral striatum

    Directory of Open Access Journals (Sweden)

    Anne Marije Kaag

    2016-08-01

    Full Text Available Appetitive conditioning refers to the process of learning cue-reward associations and is mediated by the mesocorticolimbic system. Appetitive conditioned responses are difficult to extinguish, especially for highly salient rewards such as food and drugs. We investigate whether aversive counterconditioning can alter reward reinstatement in the ventral striatum in healthy volunteers using functional Magnetic Resonance Imaging (fMRI. In the initial conditioning phase, two different stimuli were reinforced with a monetary reward. In the subsequent counterconditioning phase, one of these stimuli was paired with an aversive shock to the wrist. In the following extinction phase, none of the stimuli were reinforced. In the final reinstatement phase, reward was reinstated by informing the participants that the monetary gain could be doubled. Our fMRI data revealed that reward signalling in the ventral striatum and ventral tegmental area following reinstatement was smaller for the stimulus that was counterconditioned with an electrical shock, compared to the non-counterconditioned stimulus. A functional connectivity analysis showed that aversive counterconditioning strengthened striatal connectivity with the hippocampus and insula. These results suggest that reward signalling in the ventral striatum can be attenuated through aversive counterconditioning, possibly by concurrent retrieval of the aversive association through enhanced connectivity with hippocampus and insula.

  18. International Environmental Agreements with Endogenous or Exogenous Risk

    OpenAIRE

    Fuhai Hong; Larry Karp

    2014-01-01

    We examine the effect of endogenous and exogenous risk on the equilibrium (expected) membership of an International Environmental Agreement when countries are risk averse. Endogenous risk arises when countries use mixed rather than pure strategies at the participation game, and exogenous risk arises from the inherent uncertainty about the costs and benefits of increased abate- ment. Under endogenous risk, an increase in risk aversion increases expected participation. Under exogenous risk and ...

  19. Genotype Modulates Age-Related Alterations in Sensitivity to the Aversive Effects of Ethanol: An 8 Inbred Strain Analysis of Conditioned Taste Aversion

    Science.gov (United States)

    Moore, Eileen M.; Forrest, Robert D.; Boehm, Stephen L.

    2012-01-01

    Adolescent individuals display altered behavioral sensitivity to ethanol, which may contribute to the increased ethanol consumption seen in this age-group. However, genetics also exert considerable influence on both ethanol intake and sensitivity. Thus far there is little research assessing the combined influence of developmental and genetic alcohol sensitivities. Sensitivity to the aversive effects of ethanol using a conditioned taste aversion (CTA) procedure was measured during both adolescence (P30) and adulthood (P75) in 8 inbred mouse strains (C57BL/6J, DBA/2J, 129S1/SvImJ, A/J, BALB/cByJ, BTBR T+tf/J, C3H/HeJ, and FVB/NJ). Adolescent and adult mice were water deprived, and subsequently provided with access to 0.9% (v/v) NaCl solution for 1h. Immediately following access mice were administered ethanol (0, 1.5, 2.25, 3g/kg, ip). This procedure was repeated in 72h intervals for a total of 5 CTA trials. Sensitivity to the aversive effects of ethanol was highly dependent upon both strain and age. Within an inbred strain, adolescent animals were consistently less sensitive to the aversive effects of ethanol than their adult counterparts. However, the dose of ethanol required to produce an aversion response differed as a function of both age and strain. PMID:23171343

  20. The strength of aversive and appetitive associations and maladaptive behaviors.

    Science.gov (United States)

    Itzhak, Yossef; Perez-Lanza, Daniel; Liddie, Shervin

    2014-08-01

    Certain maladaptive behaviors are thought to be acquired through classical Pavlovian conditioning. Exaggerated fear response, which can develop through Pavlovian conditioning, is associated with acquired anxiety disorders such as post-traumatic stress disorders (PTSDs). Inflated reward-seeking behavior, which develops through Pavlovian conditioning, underlies some types of addictive behavior (e.g., addiction to drugs, food, and gambling). These maladaptive behaviors are dependent on associative learning and the development of long-term memory (LTM). In animal models, an aversive reinforcer (fear conditioning) encodes an aversive contextual and cued LTM. On the other hand, an appetitive reinforcer results in conditioned place preference (CPP) that encodes an appetitive contextual LTM. The literature on weak and strong associative learning pertaining to the development of aversive and appetitive LTM is relatively scarce; thus, this review is particularly focused on the strength of associative learning. The strength of associative learning is dependent on the valence of the reinforcer and the salience of the conditioned stimulus that ultimately sways the strength of the memory trace. Our studies suggest that labile (weak) aversive and appetitive LTM may share similar signaling pathways, whereas stable (strong) aversive and appetitive LTM is mediated through different pathways. In addition, we provide some evidence suggesting that extinction of aversive fear memory and appetitive drug memory is likely to be mediated through different signaling molecules. We put forward the importance of studies aimed to investigate the molecular mechanisms underlying the development of weak and strong memories (aversive and appetitive), which would ultimately help in the development of targeted pharmacotherapies for the management of maladaptive behaviors that arise from classical Pavlovian conditioning. © 2014 International Union of Biochemistry and Molecular Biology.

  1. Reappraising social insect behavior through aversive responsiveness and learning.

    Science.gov (United States)

    Roussel, Edith; Carcaud, Julie; Sandoz, Jean-Christophe; Giurfa, Martin

    2009-01-01

    The success of social insects can be in part attributed to their division of labor, which has been explained by a response threshold model. This model posits that individuals differ in their response thresholds to task-associated stimuli, so that individuals with lower thresholds specialize in this task. This model is at odds with findings on honeybee behavior as nectar and pollen foragers exhibit different responsiveness to sucrose, with nectar foragers having higher response thresholds to sucrose concentration. Moreover, it has been suggested that sucrose responsiveness correlates with responsiveness to most if not all other stimuli. If this is the case, explaining task specialization and the origins of division of labor on the basis of differences in response thresholds is difficult. To compare responsiveness to stimuli presenting clear-cut differences in hedonic value and behavioral contexts, we measured appetitive and aversive responsiveness in the same bees in the laboratory. We quantified proboscis extension responses to increasing sucrose concentrations and sting extension responses to electric shocks of increasing voltage. We analyzed the relationship between aversive responsiveness and aversive olfactory conditioning of the sting extension reflex, and determined how this relationship relates to division of labor. Sucrose and shock responsiveness measured in the same bees did not correlate, thus suggesting that they correspond to independent behavioral syndromes, a foraging and a defensive one. Bees which were more responsive to shock learned and memorized better aversive associations. Finally, guards were less responsive than nectar foragers to electric shocks, exhibiting higher tolerance to low voltage shocks. Consequently, foragers, which are more sensitive, were the ones learning and memorizing better in aversive conditioning. Our results constitute the first integrative study on how aversive responsiveness affects learning, memory and social

  2. Reappraising social insect behavior through aversive responsiveness and learning.

    Directory of Open Access Journals (Sweden)

    Edith Roussel

    Full Text Available The success of social insects can be in part attributed to their division of labor, which has been explained by a response threshold model. This model posits that individuals differ in their response thresholds to task-associated stimuli, so that individuals with lower thresholds specialize in this task. This model is at odds with findings on honeybee behavior as nectar and pollen foragers exhibit different responsiveness to sucrose, with nectar foragers having higher response thresholds to sucrose concentration. Moreover, it has been suggested that sucrose responsiveness correlates with responsiveness to most if not all other stimuli. If this is the case, explaining task specialization and the origins of division of labor on the basis of differences in response thresholds is difficult.To compare responsiveness to stimuli presenting clear-cut differences in hedonic value and behavioral contexts, we measured appetitive and aversive responsiveness in the same bees in the laboratory. We quantified proboscis extension responses to increasing sucrose concentrations and sting extension responses to electric shocks of increasing voltage. We analyzed the relationship between aversive responsiveness and aversive olfactory conditioning of the sting extension reflex, and determined how this relationship relates to division of labor.Sucrose and shock responsiveness measured in the same bees did not correlate, thus suggesting that they correspond to independent behavioral syndromes, a foraging and a defensive one. Bees which were more responsive to shock learned and memorized better aversive associations. Finally, guards were less responsive than nectar foragers to electric shocks, exhibiting higher tolerance to low voltage shocks. Consequently, foragers, which are more sensitive, were the ones learning and memorizing better in aversive conditioning.Our results constitute the first integrative study on how aversive responsiveness affects learning, memory and

  3. Risk aversion and uncertainty in cost-effectiveness analysis: the expected-utility, moment-generating function approach.

    Science.gov (United States)

    Elbasha, Elamin H

    2005-05-01

    The availability of patient-level data from clinical trials has spurred a lot of interest in developing methods for quantifying and presenting uncertainty in cost-effectiveness analysis (CEA). Although the majority has focused on developing methods for using sample data to estimate a confidence interval for an incremental cost-effectiveness ratio (ICER), a small strand of the literature has emphasized the importance of incorporating risk preferences and the trade-off between the mean and the variance of returns to investment in health and medicine (mean-variance analysis). This paper shows how the exponential utility-moment-generating function approach is a natural extension to this branch of the literature for modelling choices from healthcare interventions with uncertain costs and effects. The paper assumes an exponential utility function, which implies constant absolute risk aversion, and is based on the fact that the expected value of this function results in a convenient expression that depends only on the moment-generating function of the random variables. The mean-variance approach is shown to be a special case of this more general framework. The paper characterizes the solution to the resource allocation problem using standard optimization techniques and derives the summary measure researchers need to estimate for each programme, when the assumption of risk neutrality does not hold, and compares it to the standard incremental cost-effectiveness ratio. The importance of choosing the correct distribution of costs and effects and the issues related to estimation of the parameters of the distribution are also discussed. An empirical example to illustrate the methods and concepts is provided. Copyright 2004 John Wiley & Sons, Ltd

  4. Black Faces, White Spaces: Adjusting Self to Manage Aversive ...

    African Journals Online (AJOL)

    This article focuses on conversations in which South Africans speak about their experiences of aversive racism in 'raced' spaces. The article interrogates experiences of aversive racism and argues that, for various reasons, racial segregation and less overt forms of racism remain entrenched in South Africa. Presently, those ...

  5. Greater absolute risk for all subtypes of breast cancer in the US than Malaysia.

    Science.gov (United States)

    Horne, Hisani N; Beena Devi, C R; Sung, Hyuna; Tang, Tieng Swee; Rosenberg, Philip S; Hewitt, Stephen M; Sherman, Mark E; Anderson, William F; Yang, Xiaohong R

    2015-01-01

    Hormone receptor (HR) negative breast cancers are relatively more common in low-risk than high-risk countries and/or populations. However, the absolute variations between these different populations are not well established given the limited number of cancer registries with incidence rate data by breast cancer subtype. We, therefore, used two unique population-based resources with molecular data to compare incidence rates for the 'intrinsic' breast cancer subtypes between a low-risk Asian population in Malaysia and high-risk non-Hispanic white population in the National Cancer Institute's surveillance, epidemiology, and end results 18 registries database (SEER 18). The intrinsic breast cancer subtypes were recapitulated with the joint expression of the HRs (estrogen receptor and progesterone receptor) and human epidermal growth factor receptor-2 (HER2). Invasive breast cancer incidence rates overall were fivefold greater in SEER 18 than in Malaysia. The majority of breast cancers were HR-positive in SEER 18 and HR-negative in Malaysia. Notwithstanding the greater relative distribution for HR-negative cancers in Malaysia, there was a greater absolute risk for all subtypes in SEER 18; incidence rates were nearly 7-fold higher for HR-positive and 2-fold higher for HR-negative cancers in SEER 18. Despite the well-established relative breast cancer differences between low-risk and high-risk countries and/or populations, there was a greater absolute risk for HR-positive and HR-negative subtypes in the US than Malaysia. Additional analytical studies are sorely needed to determine the factors responsible for the elevated risk of all subtypes of breast cancer in high-risk countries like the United States.

  6. Aversive properties of negative incentive shifts in Fischer 344 and Lewis rats

    Science.gov (United States)

    Brewer, Adam; Johnson, Patrick; Stein, Jeff; Schlund, Michael; Williams, Dean C.

    2018-01-01

    Research on incentive contrast highlights that reward value is not absolute but rather is based upon comparisons we make to rewards we have received and expect to receive. Both human and nonhuman studies on incentive contrast show that shifting from a larger more-valued reward to a smaller less-valued reward is associated with long periods of nonresponding—a negative contrast effect. In this investigation, we used two different genetic rat strains, Fischer 344 and Lewis rats that putatively differ in their sensitivity to aversive stimulation, to assess the aversive properties of large-to-small reward shifts (negative incentive shifts). Additionally, we examined the extent to which increasing cost (fixed-ratio requirements) modulates negative contrast effects. In the presence of a cue that signaled the upcoming reward magnitude, lever pressing was reinforced with one of two different magnitudes of food (large or small). This design created two contrast shifts (small-to-large, large-to-small) and two shifts used as control conditions (small-to-small, large-to-large). Results showed a significant interaction between rat strain and cost requirements only during the negative incentive shift with the emotionally reactive Fischer 344 rats exhibiting significantly longer response latencies with increasing cost, highlighting greater negative contrast. These findings are more consistent with emotionality accounts of negative contrast and results of neurophysiological research that suggests shifting from a large to a small reward is aversive. Findings also highlight how subjective reward value and motivation is a product of gene-environment interactions. PMID:27864048

  7. Effects of area postrema lesions on taste aversions produced by treatment with WR-2721 in the rat

    International Nuclear Information System (INIS)

    Rabin, B.M.; Hunt, W.A.; Lee, J.

    1986-01-01

    The conditioned taste aversion procedure was used to further assess some behavioral effects of treatment with the putative radioprotectant WR-2721 and the role of the area postrema in mediating the behavioral effects of treatment. Treatment with 40, 150 or 300 mg/kg WR-2721 produced dose-dependent changes in sucrose intake in both control rats and rats with area postrema lesions. The effectiveness of the lesion in disrupting the acquisition of an aversion varied as a function of the dose administered, with the lesions producing the greatest disruption of aversion learning at the lowest dose and little disruption at the highest dose tested. At all dose levels, sucrose intake was greater for the rats with area postrema lesions than for the sham-operated control rats. Treatment with WR-2721 also produced significant decreases in total fluid intake, particularly at the higher dose levels. The results are discussed as indicating that treatment with WR-2721 produces highly toxic effects on behavior and that the use of the compound as a radioprotectant for radiotherapy requires additional assessment of its effects on brain function and behavior

  8. Risk Attitudes, Sample Selection and Attrition in a Longitudinal Field Experiment

    DEFF Research Database (Denmark)

    Harrison, Glenn W.; Lau, Morten Igel

    with respect to risk attitudes. Our design builds in explicit randomization on the incentives for participation. We show that there are significant sample selection effects on inferences about the extent of risk aversion, but that the effects of subsequent sample attrition are minimal. Ignoring sample...... selection leads to inferences that subjects in the population are more risk averse than they actually are. Correcting for sample selection and attrition affects utility curvature, but does not affect inferences about probability weighting. Properly accounting for sample selection and attrition effects leads...... to findings of temporal stability in overall risk aversion. However, that stability is around different levels of risk aversion than one might naively infer without the controls for sample selection and attrition we are able to implement. This evidence of “randomization bias” from sample selection...

  9. The effects of continuous and intermittent ethanol exposure in adolesence on the aversive properties of ethanol during adulthood.

    Science.gov (United States)

    Diaz-Granados, Jaime L; Graham, Danielle L

    2007-12-01

    Alcohol abuse among adolescents is prevalent. Epidemiological studies suggest that alcohol abuse during the adolescent developmental period may result in long-term changes such as an increased susceptibility to alcohol-related problems in adulthood. Laboratory findings suggest that alcohol exposure during the adolescent developmental period, as compared with adulthood, may differentially impact subsequent neurobehavioral responses to alcohol. The present study was designed to examine whether ethanol exposure, continuous versus intermittent, during the adolescent developmental period would alter the aversive properties of ethanol in adult C3H mice. Periadolescent (PD28) male C3H mice were exposed to 64 hours of continuous or intermittent ethanol vapor. As a comparison, adult (PD70) C3H mice were also exposed to 64 hours of continuous or intermittent ethanol vapor. Six weeks after ethanol exposure, taste aversion conditioning was carried out on both ethanol pre-exposed and ethanol-naive animals using a 1-trial, 1-flavor taste-conditioning procedure. Ethanol exposure during the periadolescent period significantly attenuated a subsequent ethanol-induced conditioned taste aversion, as compared with control animals. Adult animals exposed to chronic ethanol vapor during adolescence showed less of an aversion to an ethanol-paired flavor than ethanol-naive adults. Intermittent exposure to ethanol vapor during periadolescence produced a greater attenuation. It is suggested that ethanol exposure during the periadolescent period results in long-term neurobehavioral changes, which lessen a conditioned aversion to ethanol in adulthood. It is suggested that this age-related effect may underlie the increased susceptibility to alcohol-related problems which is negatively correlated with the age of onset for alcohol abuse.

  10. Aversive tension in female adolescents with Anorexia Nervosa: a controlled ecological momentary assessment using smartphones.

    Science.gov (United States)

    Kolar, David R; Hammerle, Florian; Jenetzky, Ekkehart; Huss, Michael; Bürger, Arne

    2016-04-12

    Current models of Anorexia Nervosa (AN) emphasize the role of emotion regulation. Aversive tension, described as a state of intense arousal and negative valence, is considered to be a link between emotional events and disordered eating. Recent research focused only on adult patients, and mainly general emotion regulation traits were studied. However, the momentary occurrence of aversive tension, particularly in adolescents with AN, has not been previously studied. 20 female adolescents with AN in outpatient treatment and 20 healthy adolescents aged 12 to 19 years participated in an ecological momentary assessment using their smartphones. Current states of aversive tension and events were assessed hourly for two consecutive weekdays. Mean and maximum values of aversive tension were compared. Multilevel analyses were computed to test the influence of time and reported events on aversive tension. The effect of reported events on subsequent changes of aversive tension in patients with AN were additionally tested in a multilevel model. AN patients showed higher mean and maximum levels of aversive tension. In a multilevel model, reported food intake was associated with higher levels of aversive tension in the AN group, whereas reported school or sport-related events were not linked to specific states of aversive tension. After food intake, subsequent increases of aversive tension were diminished and decreases of aversive tension were induced in adolescents with AN. Aversive tension may play a substantial role in the psychopathology of AN, particular in relation with food intake. Therefore, treatment should consider aversive tension as a possible intervening variable during refeeding. Our findings encourage further research on aversive tension and its link to disordered eating. German register of clinical trials (DRKS): DRKS00005228 (Date of registration: September 2, 2013).

  11. Genotype modulates age-related alterations in sensitivity to the aversive effects of ethanol: an eight inbred strain analysis of conditioned taste aversion.

    Science.gov (United States)

    Moore, E M; Forrest, R D; Boehm, S L

    2013-02-01

    Adolescent individuals display altered behavioral sensitivity to ethanol, which may contribute to the increased ethanol consumption seen in this age-group. However, genetics also exert considerable influence on both ethanol intake and sensitivity. Currently there is little research assessing the combined influence of developmental and genetic alcohol sensitivities. Sensitivity to the aversive effects of ethanol using a conditioned taste aversion (CTA) procedure was measured during both adolescence (P30) and adulthood (P75) in eight inbred mouse strains (C57BL/6J, DBA/2J, 129S1/SvImJ, A/J, BALB/cByJ, BTBR T(+) tf/J, C3H/HeJ and FVB/NJ). Adolescent and adult mice were water deprived, and subsequently provided with access to 0.9% (v/v) NaCl solution for 1 h. Immediately following access mice were administered ethanol (0, 1.5, 2.25 and 3 g/kg, ip). This procedure was repeated in 72 h intervals for a total of five CTA trials. Sensitivity to the aversive effects of ethanol was highly dependent upon both strain and age. Within an inbred strain, adolescent animals were consistently less sensitive to the aversive effects of ethanol than their adult counterparts. However, the dose of ethanol required to produce an aversion response differed as a function of both age and strain. © 2012 Blackwell Publishing Ltd and International Behavioural and Neural Genetics Society.

  12. Fractional-moment CAPM with loss aversion

    International Nuclear Information System (INIS)

    Wu Yahao; Wang Xiaotian; Wu Min

    2009-01-01

    In this paper, we present a new fractional-order value function which generalizes the value function of Kahneman and Tversky [Kahneman D, Tversky A. Prospect theory: an analysis of decision under risk. Econometrica 1979;47:263-91; Tversky A, Kahneman D. Advances in prospect theory: cumulative representation of uncertainty. J. Risk Uncertainty 1992;4:297-323], and give the corresponding fractional-moment versions of CAPM in the cases of both the prospect theory [Kahneman D, Tversky A. Prospect theory: an analysis of decision under risk. Econometrica 1979;47:263-91; Tversky A, Kahneman D. Advances in prospect theory: cumulative representation of uncertainty. J. Risk Uncertainty 1992;4:297-323] and the expected utility model. The models that we obtain can be used to price assets when asset return distributions are likely to be asymmetric stable Levy distribution during panics and stampedes in worldwide security markets in 2008. In particular, from the prospect theory we get the following fractional-moment CAPM with loss aversion: E(R i -R 0 )=(E[(W-W 0 ) + -0.12 (R i -R 0 )]+2.25E[(W 0 -W) + -0.12 (R i -R 0 )])/ (E[(W-W 0 ) + -0.12 (W-R 0 )]+2.25E[(W 0 -W) + -0.12 (W-R 0 )]) .E(W-R 0 ), where W 0 is a fixed reference point distinguishing between losses and gains.

  13. Risk Aversion and Religion

    NARCIS (Netherlands)

    Noussair, C.N.; Trautmann, S.T.; van de Kuilen, G.; Vellekoop, N.

    2012-01-01

    Abstract: Using a dataset for a demographically representative sample of the Dutch population, containing a revealed preference risk attitude measure, as well as very detailed information about participants’ religious background, we study three issues raised in previous literature. First, we find

  14. The Risk Preferences of U.S. Executives

    DEFF Research Database (Denmark)

    Brenner, Steffen

    2015-01-01

    In this paper, I elicit risk attitudes of U.S. executives by calibrating a subjective option valuation model for option exercising data (1996 to 2008), yielding approximately 65,000 values of relative risk aversion (RRA) for almost 7,000 executives. The observed behavior is generally consistent...... with moderate risk aversion and a median (mean) RRA close to one (three). Values are validated for chief executive officers (CEOs) by testing theory-based predictions on the influence of individual characteristics on risk preferences such as gender, marital status, religiosity, and intelligence. Senior managers...... such as CEOs, presidents, and chairpersons of the boards of directors are significantly less risk averse than non-senior executives. RRA heterogeneity is strongly correlated with sector membership and firm-level variables such as size, performance, and capital structure. Alternative factors influencing option...

  15. Extinction of aversive classically conditioned human sexual response.

    Science.gov (United States)

    Brom, Mirte; Laan, Ellen; Everaerd, Walter; Spinhoven, Philip; Both, Stephanie

    2015-04-01

    Research has shown that acquired subjective likes and dislikes are quite resistant to extinction. Moreover, studies on female sexual response demonstrated that diminished genital arousal and positive affect toward erotic stimuli due to aversive classical conditioning did not extinguish during an extinction phase. Possible resistance to extinction of aversive conditioned sexual responses may have important clinical implications. However, resistance to extinction of aversive conditioned human sexual response has not been studied using extensive extinction trials. This article aims to study resistance to extinction of aversive conditioned sexual responses in sexually functional men and women. A differential conditioning experiment was conducted, with two erotic pictures as conditioned stimulus (CSs) and a painful stimulus as unconditioned stimuli (USs). Only one CS (the CS+) was followed by the US during the acquisition phase. Conditioned responses were assessed during the extinction phase. Penile circumference and vaginal pulse amplitude were assessed, and ratings of affective value and subjective sexual arousal were obtained. Also, a stimulus response compatibility task was included to assess automatic approach and avoidance tendencies. Men and women rated the CS+ more negative as compared with the CS-. During the first trials of the extinction phase, vaginal pulse amplitude was lower in response to the CS+ than in response to the CS-, and on the first extinction trial women rated the CS+ as less sexually arousing. Intriguingly, men did not demonstrate attenuated genital and subjective sexual response. Aversive conditioning, by means of painful stimuli, only affects sexual responses in women, whereas it does not in men. Although conditioned sexual likes and dislikes are relatively persistent, conditioned affect eventually does extinguish. © 2014 International Society for Sexual Medicine.

  16. Is there time discounting for risk premium?

    Science.gov (United States)

    Shavit, Tal; Rosenboim, Mosi

    2015-03-01

    Individuals with a higher subjective discount rate concentrate more on the present and delay is more significant for them. However, when a risky asset is delayed, not only is the outcome delayed but also the risk. In this paper, we suggest a new, two-stage experimental method with real monetary incentives that allows us to distinguish between the effect of the risk and the effect of the time when pricing a risky asset. We show that when individuals have greater preference for the present, their risk aversion for a risky asset realized in the future decreases. We argue that the effect of the risk for future asset is lower for individuals with higher time preference because they discount not only the outcome but also the risks. © Society for the Experimental Analysis of Behavior.

  17. Food Aversions and Cravings during Pregnancy on Yasawa Island, Fiji.

    Science.gov (United States)

    McKerracher, Luseadra; Collard, Mark; Henrich, Joseph

    2016-09-01

    Women often experience novel food aversions and cravings during pregnancy. These appetite changes have been hypothesized to work alongside cultural strategies as adaptive responses to the challenges posed by pregnancy (e.g., maternal immune suppression). Here, we report a study that assessed whether data from an indigenous population in Fiji are consistent with the predictions of this hypothesis. We found that aversions focus predominantly on foods expected to exacerbate the challenges of pregnancy. Cravings focus on foods that provide calories and micronutrients while posing few threats to mothers and fetuses. We also found that women who experience aversions to specific foods are more likely to crave foods that meet nutritional needs similar to those provided by the aversive foods. These findings are in line with the predictions of the hypothesis. This adds further weight to the argument that appetite changes may function in parallel with cultural mechanisms to solve pregnancy challenges.

  18. Ethanol-induced conditioned taste avoidance: reward or aversion?

    Science.gov (United States)

    Liu, Chuang; Showalter, John; Grigson, Patricia Sue

    2009-03-01

    Rats avoid intake of a palatable taste cue when paired with all drugs of abuse tested. Evidence suggests that, at least for morphine and cocaine, rats avoid the taste cue because they are anticipating the rewarding properties of the drug. Thus, the suppressive effects of a rewarding sucrose solution and cocaine, but not those of the putatively aversive agent, lithium chloride (LiCl), are exaggerated in drug-sensitive Lewis rats. Likewise, the suppressive effects of sucrose and morphine, but not those of LiCl, are eliminated by bilateral lesions of the gustatory thalamus. Unlike morphine and cocaine, it is less clear whether rewarding or aversive drug properties are responsible for ethanol-induced suppression of intake of a taste cue. The present set of studies tests whether, like cocaine, ethanol-induced suppression of intake of a taste cue also is greater in the drug-sensitive Lewis rats and whether the suppressive effects of the drug are prevented by bilateral lesions of the taste thalamus. In Experiment 1, fluid-deprived Lewis and Fischer rats were given 5-minute access to 0.15% saccharin and then injected with saline or a range of doses of ethanol (0.5, 0.75, 1.0, or 1.5 g/kg). There was a total of 6 such pairings. In Experiments 2 and 3, Sprague-Dawley rats received bilateral electrophysiologically guided lesions of the gustatory thalamus. After recovery, suppression of intake of the saccharin cue was evaluated following repeated daily pairings with either a high (1.5 g/kg) or a low (0.75 g/kg) dose of ethanol. Ethanol-induced suppression of intake of the saccharin conditioned stimulus (CS) did not differ between the drug-sensitive Lewis rats relative to the less-sensitive Fischer rats. Lesions of the taste thalamus, however, prevented the suppressive effect of the 0.75 g/kg dose of the drug, but had no impact on the suppressive effect of the 1.5 g/kg dose of ethanol. The results suggest that the suppressive effects of ethanol on CS intake are mediated by both

  19. Medial prefrontal cortex dopamine controls the persistent storage of aversive memories

    Science.gov (United States)

    Gonzalez, María C.; Kramar, Cecilia P.; Tomaiuolo, Micol; Katche, Cynthia; Weisstaub, Noelia; Cammarota, Martín; Medina, Jorge H.

    2014-01-01

    Medial prefrontal cortex (mPFC) is essential for initial memory processing and expression but its involvement in persistent memory storage has seldom been studied. Using the hippocampus dependent inhibitory avoidance learning task and the hippocampus-independent conditioned taste aversion paradigm together with specific dopamine receptor agonists and antagonists we found that persistence but not formation of long-term aversive memories requires dopamine D1/D5 receptors activation in mPFC immediately after training and, depending on the task, between 6 and 12 h later. Our results indicate that besides its well-known participation in retrieval and early consolidation, mPFC also modulates the endurance of long-lasting aversive memories regardless of whether formation of the aversive mnemonic trace requires the participation of the hippocampus. PMID:25506318

  20. Loss Aversion, Team Relocations, and Major League Expansion

    OpenAIRE

    Humphreys, Brad; Zhou, Li

    2014-01-01

    Professional sports teams receive large public subsidies for new facility construction. Empirical research suggests that these subsidies cannot be justified by tangible or intangible economic benefits. We develop a model of bargaining between local governments and teams over subsidies that includes league expansion decisions. The model features loss aversion by fans that captures lost utility when a team leaves a city. The model predicts that teams exploit this loss aversion to extract larger...

  1. Joint Inventory, Pricing, and Advertising Decisions with Surplus and Stockout Loss Aversions

    Directory of Open Access Journals (Sweden)

    Bing-Bing Cao

    2016-01-01

    Full Text Available The newsvendor models considering decision-makers’ behavioral factors remain a fruitful research area in operation management field in past decade. In this paper, we further extend the current literatures to look into joint inventory, pricing, and advertising decisions considering loss aversion effects under the newsvendor setting. The purpose is to explore how the loss aversions affect the optimal policy of order quantity, price, and advertising effort level. We present an integrated utility model to measure both economic payoff and loss aversion utility of the newsvendor, where surplus loss aversion and stockout loss aversion are first separately defined and quantified. Then, we analyze the optimal solution conditions of the integrated model under exogenous and endogenous price cases, respectively. Under exogenous price case, we find that the uniquely optimal policy exists and is presented in the closed form. Under endogenous price case, the optimal policy is determined under mild conditions; we also provide the solutions when order quantity factor or advertising effort level is fixed in this case. In addition, the sensitivity analysis shows that the loss aversions affect the optimal decisions of order quantity, price, and advertising effort level in a systematic way.

  2. Economic decision biases and fundamental motivations: how mating and self-protection alter loss aversion.

    Science.gov (United States)

    Li, Yexin Jessica; Kenrick, Douglas T; Griskevicius, Vladas; Neuberg, Steven L

    2012-03-01

    Much research shows that people are loss averse, meaning that they weigh losses more heavily than gains. Drawing on an evolutionary perspective, we propose that although loss aversion might have been adaptive for solving challenges in the domain of self-protection, this may not be true for men in the domain of mating. Three experiments examine how loss aversion is influenced by mating and self-protection motives. Findings reveal that mating motives selectively erased loss aversion in men. In contrast, self-protective motives led both men and women to become more loss averse. Overall, loss aversion appears to be sensitive to evolutionarily important motives, suggesting that it may be a domain-specific bias operating according to an adaptive logic of recurring threats and opportunities in different evolutionary domains.

  3. College Students with ADHD at Greater Risk for Sleep Disorders

    Science.gov (United States)

    Gaultney, Jane F.

    2014-01-01

    The pediatric literature indicates that children with ADHD are at greater risk for sleep problems, daytime sleepiness, and some sleep disorders than children with no diagnosed disability. It has not been determined whether this pattern holds true among emerging adults, and whether comorbid sleep disorders with ADHD predict GPA. The present study…

  4. Ambiguity aversion is not universal

    NARCIS (Netherlands)

    Kocher, M.G.; Lahno, Amrei; Trautmann, Stefan

    Assuming universal ambiguity aversion, an extensive theoretical literature studies how ambiguity can account for market anomalies from the perspective of expected utility-based theories. We provide a systematic experimental assessment of ambiguity attitudes in different likelihood ranges, and in the

  5. Loss aversion and hypoxia: less loss aversion in oxygen-depleted environment.

    Science.gov (United States)

    Pighin, Stefania; Bonini, Nicolao; Savadori, Lucia; Hadjichristidis, Constantinos; Schena, Federico

    2014-03-01

    Hypoxia, the deprivation of adequate oxygen supply, constitutes a direct threat to survival by disrupting cardiovascular or respiratory homeostasis and eliciting a respiratory distress. Although hypoxia has been shown to increase brain vulnerability and impair basic cognitive functions, only one study has examined its effect on decision-making. The present study examined the effect of mild hypoxia on individual's loss aversion, that is, the tendency to be more affected by losses than equal sized gains. A sample of 26 participants were asked to either accept or reject a series of mixed gambles once in an oxygen-depleted environment (14.1% oxygen concentration) and once in a normoxic environment (20.9% oxygen concentration). Each gamble involved a 50-50 chance of winning or losing specified amounts of money. Mild hypoxia decreased loss aversion: on average in the normoxic condition participants accepted gambles if the gain was at least 2.4 times as large as the loss, whereas in the oxygen-depleted condition participants accepted gambles if the gain was at least 1.7 times as large as the loss. Mild hypoxia may push individuals to be less cautious in daily decisions that involve a trade-off between a gain and a loss.

  6. Loss Aversion and Time-Differentiated Electricity Pricing

    Energy Technology Data Exchange (ETDEWEB)

    Spurlock, C. Anna [Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United States)

    2015-06-01

    I develop a model of loss aversion over electricity expenditure, from which I derive testable predictions for household electricity consumption while on combination time-of-use (TOU) and critical peak pricing (CPP) plans. Testing these predictions results in evidence consistent with loss aversion: (1) spillover effects - positive expenditure shocks resulted in significantly more peak consumption reduction for several weeks thereafter; and (2) clustering - disproportionate probability of consuming such that expenditure would be equal between the TOUCPP or standard flat-rate pricing structures. This behavior is inconsistent with a purely neoclassical utility model, and has important implications for application of time-differentiated electricity pricing.

  7. Appetitive and aversive visual learning in freely moving Drosophila

    Directory of Open Access Journals (Sweden)

    Christopher Schnaitmann

    2010-03-01

    Full Text Available To compare appetitive and aversive visual memories of the fruit fly Drosophila melanogaster, we developed a new paradigm for classical conditioning. Adult flies are trained en masse to differentially associate one of two visual conditioned stimuli (blue and green light as conditioned stimuli or CS with an appetitive or aversive chemical substance (unconditioned stimulus or US. In a test phase, flies are given a choice between the paired and the unpaired visual stimuli. Associative memory is measured based on altered visual preference in the test. If a group of flies has, for example, received a sugar reward with green light, they show a significantly higher preference for the green stimulus during the test than another group of flies having received the same reward with blue light. We demonstrate critical parameters for the formation of visual appetitive memory, such as training repetition, order of reinforcement, starvation, and individual conditioning. Furthermore, we show that formic acid can act as an aversive chemical reinforcer, yielding weak, yet significant, aversive memory. These results provide a basis for future investigations into the cellular and molecular mechanisms underlying visual memory and perception in Drosophila.

  8. Inexact stochastic risk-aversion optimal day-ahead dispatch model for electricity system management with wind power under uncertainty

    International Nuclear Information System (INIS)

    Ji, Ling; Huang, Guo-He; Huang, Lu-Cheng; Xie, Yu-Lei; Niu, Dong-Xiao

    2016-01-01

    High penetration of wind power generation and deregulated electricity market brings a great challenge to the electricity system operators. It is crucial to make optimal strategy among various generation units and spinning reserve for supporting the system safety operation. By integrating interval two-stage programming and stochastic robust programming, this paper proposes a novel robust model for day-ahead dispatch and risk-aversion management under uncertainties. In the proposed model, the uncertainties are expressed as interval values with different scenario probability. The proposed method requires low computation, and still retains the complete information. A case study is to validate the effectiveness of this approach. Facing the uncertainties of future demand and electricity price, the system operators need to make optimal dispatch strategy for thermal power units and wind turbine, and arrange proper spinning reserve and flexible demand response program to mitigate wind power forecasting error. The optimal strategies provide the system operators with better trade-off between the maximum benefits and the minimum system risk. In additional, two different market rules are compared. The results show that extra financial penalty for the wind power dispatch deviation is another efficient way to enhance the risk consciousness of decision makers and lead to more conservative strategy. - Highlights: • An inexact two-stage stochastic robust programming model for electricity system with wind power penetration. • Uncertainties expressed as discrete intervals and probability distributions. • Demand response program was introduced to adjust the deviation in real-time market. • Financial penalty for imbalance risk from wind power generation was evaluated.

  9. Role of IL-4 in aversion induced by food allergy in mice.

    Science.gov (United States)

    Dourado, Luana Pereira Antunes; Saldanha, Janaína Cláudia da Silva; Gargiulo, Daniela Longo; Noviello, Maria de Lourdes Meirelles; Brant, Cláudia Caldeira; Reis, Maria Letícia Costa; Souza, Raphaela Mendes Fernandes de; Faria, Ana Maria Caetano; Souza, Danielle da Glória de; Cara, Denise Carmona

    2010-01-01

    To ascertain the role of IL-4 in aversion to antigen induced by food allergy, wild type and IL-4 deficient BALB/c mice were sensitized with ovalbumin and challenged orally with egg white. Sensitized wild type mice had increased production of IL-4 by spleen and mesenteric lymph node cells in vitro, higher levels of serum anti-ovalbumin IgE and IgG1, aversion to ingestion of the antigen and loss of body weight after continuous oral challenge. Intestinal changes in wild type sensitized mice included eosinophil infiltration and increased mucus production. The IL-4 deficiency impaired the development of food allergy and the aversion to antigen, suggesting the involvement of the antigen specific antibodies. When IL-4 deficient mice received serum from sensitized wild type donors, the aversion was restored. These results indicate that production of IL-4 and specific IgE/IgG1 antibodies correlate with aversion to antigen induced by food allergy in mice. Copyright 2009 Elsevier Inc. All rights reserved.

  10. The Neural Foundations of Reaction and Action in Aversive Motivation.

    Science.gov (United States)

    Campese, Vincent D; Sears, Robert M; Moscarello, Justin M; Diaz-Mataix, Lorenzo; Cain, Christopher K; LeDoux, Joseph E

    2016-01-01

    Much of the early research in aversive learning concerned motivation and reinforcement in avoidance conditioning and related paradigms. When the field transitioned toward the focus on Pavlovian threat conditioning in isolation, this paved the way for the clear understanding of the psychological principles and neural and molecular mechanisms responsible for this type of learning and memory that has unfolded over recent decades. Currently, avoidance conditioning is being revisited, and with what has been learned about associative aversive learning, rapid progress is being made. We review, below, the literature on the neural substrates critical for learning in instrumental active avoidance tasks and conditioned aversive motivation.

  11. Acquisition of lithium chloride- and radiation-induced taste aversions in hypophysectomized rats

    International Nuclear Information System (INIS)

    Rabin, B.M.; Hunt, W.A.; Lee, J.

    1983-01-01

    The effects of hypophysectomy on the acquisition of conditioned taste aversions following injection of lithium chloride and following exposure to ionizing radiation were studied using a two-bottle preference test. Hypophysectomy did not disrupt the acquisition of a taste aversion following either treatment. The results are interpreted as: (a) suggesting that pituitary/adrenal hormones do not mediate the acquisition of a conditioned taste aversion following injections of lithium chloride or following exposure to ionizing radiation in a two-bottle preference test, and (b) consistent with other research suggesting that the involvement of pituitary/adrenal hormones in taste aversion learning may be related to the conflict induced by using a one-bottle test and not to the learning itself

  12. The Neural Basis of Aversive Pavlovian Guidance during Planning.

    Science.gov (United States)

    Lally, Níall; Huys, Quentin J M; Eshel, Neir; Faulkner, Paul; Dayan, Peter; Roiser, Jonathan P

    2017-10-18

    Important real-world decisions are often arduous as they frequently involve sequences of choices, with initial selections affecting future options. Evaluating every possible combination of choices is computationally intractable, particularly for longer multistep decisions. Therefore, humans frequently use heuristics to reduce the complexity of decisions. We recently used a goal-directed planning task to demonstrate the profound behavioral influence and ubiquity of one such shortcut, namely aversive pruning, a reflexive Pavlovian process that involves neglecting parts of the decision space residing beyond salient negative outcomes. However, how the brain implements this important decision heuristic and what underlies individual differences have hitherto remained unanswered. Therefore, we administered an adapted version of the same planning task to healthy male and female volunteers undergoing functional magnetic resonance imaging (fMRI) to determine the neural basis of aversive pruning. Through both computational and standard categorical fMRI analyses, we show that when planning was influenced by aversive pruning, the subgenual cingulate cortex was robustly recruited. This neural signature was distinct from those associated with general planning and valuation, two fundamental cognitive components elicited by our task but which are complementary to aversive pruning. Furthermore, we found that individual variation in levels of aversive pruning was associated with the responses of insula and dorsolateral prefrontal cortices to the receipt of large monetary losses, and also with subclinical levels of anxiety. In summary, our data reveal the neural signatures of an important reflexive Pavlovian process that shapes goal-directed evaluations and thereby determines the outcome of high-level sequential cognitive processes. SIGNIFICANCE STATEMENT Multistep decisions are complex because initial choices constrain future options. Evaluating every path for long decision sequences

  13. The Neural Basis of Aversive Pavlovian Guidance during Planning

    Science.gov (United States)

    Faulkner, Paul

    2017-01-01

    Important real-world decisions are often arduous as they frequently involve sequences of choices, with initial selections affecting future options. Evaluating every possible combination of choices is computationally intractable, particularly for longer multistep decisions. Therefore, humans frequently use heuristics to reduce the complexity of decisions. We recently used a goal-directed planning task to demonstrate the profound behavioral influence and ubiquity of one such shortcut, namely aversive pruning, a reflexive Pavlovian process that involves neglecting parts of the decision space residing beyond salient negative outcomes. However, how the brain implements this important decision heuristic and what underlies individual differences have hitherto remained unanswered. Therefore, we administered an adapted version of the same planning task to healthy male and female volunteers undergoing functional magnetic resonance imaging (fMRI) to determine the neural basis of aversive pruning. Through both computational and standard categorical fMRI analyses, we show that when planning was influenced by aversive pruning, the subgenual cingulate cortex was robustly recruited. This neural signature was distinct from those associated with general planning and valuation, two fundamental cognitive components elicited by our task but which are complementary to aversive pruning. Furthermore, we found that individual variation in levels of aversive pruning was associated with the responses of insula and dorsolateral prefrontal cortices to the receipt of large monetary losses, and also with subclinical levels of anxiety. In summary, our data reveal the neural signatures of an important reflexive Pavlovian process that shapes goal-directed evaluations and thereby determines the outcome of high-level sequential cognitive processes. SIGNIFICANCE STATEMENT Multistep decisions are complex because initial choices constrain future options. Evaluating every path for long decision sequences

  14. Effects of loss aversion on neural responses to loss outcomes: An event-related potential study.

    Science.gov (United States)

    Kokmotou, Katerina; Cook, Stephanie; Xie, Yuxin; Wright, Hazel; Soto, Vicente; Fallon, Nicholas; Giesbrecht, Timo; Pantelous, Athanasios; Stancak, Andrej

    2017-05-01

    Loss aversion is the tendency to prefer avoiding losses over acquiring gains of the same amount. To shed light on the spatio-temporal processes underlying loss aversion, we analysed the associations between individual loss aversion and electrophysiological responses to loss and gain outcomes in a monetary gamble task. Electroencephalographic feedback-related negativity (FRN) was computed in 29 healthy participants as the difference in electrical potentials between losses and gains. Loss aversion was evaluated using non-linear parametric fitting of choices in a separate gamble task. Loss aversion correlated positively with FRN amplitude (233-263ms) at electrodes covering the lower face. Feedback related potentials were modelled by five equivalent source dipoles. From these dipoles, stronger activity in a source located in the orbitofrontal cortex was associated with loss aversion. The results suggest that loss aversion implemented during risky decision making is related to a valuation process in the orbitofrontal cortex, which manifests during learning choice outcomes. Copyright © 2017. Published by Elsevier B.V.

  15. Different components of conditioned food aversion memory.

    Science.gov (United States)

    Nikitin, Vladimir P; Solntseva, Svetlana V; Kozyrev, Sergey A; Nikitin, Pavel V; Shevelkin, Alexey V

    2016-07-01

    Memory reconsolidation processes and protein kinase Mzeta (PKMzeta) activity in memory maintenance and reorganization are poorly understood. Therefore, we examined memory reconsolidation and PKMzeta activity during the maintenance and reorganization of a conditioned food aversion memory among snails. These processes were specifically evaluated after administration of a serotonin receptor antagonist (methiothepin), NMDA glutamate receptor antagonist (MK-801), protein synthesis inhibitor (cycloheximide; CYH), or PKMzeta inhibitor (zeta inhibitory peptide; ZIP) either 2 or 10 days after aversion training. Two days post-training, injections of MK-801 or CYH, combined with a conditioned stimulus reminder, caused amnesia development, and a second training 11 days after this induction did not lead to long-term memory formation. Interestingly, MK-801 or CYH injections and the reminder 10 days after training did not affect memory retrieval. Methiothepin and the reminder, or ZIP without the reminder, at 2 and 10 days after training led to memory impairment, while a second training 11 days after amnesia induction resulted in memory formation. These results suggest that the maintenance of a conditioned food aversion involves two different components with variable dynamics. One component could be characterized by memory strengthening over time and involve N-methyl-D-aspartate receptors and protein synthesis reconsolidation at early, but not late, training stages. The other memory component could involve serotonin-dependent reconsolidation and Mzeta-like kinase activity at both early and late stages after learning. Deficiencies within these two components led to various forms of memory impairment, which differed in terms of the formation of a conditioned food aversion during the second training. Copyright © 2016 Elsevier B.V. All rights reserved.

  16. Aversive reinforcement improves visual discrimination learning in free-flying honeybees.

    Directory of Open Access Journals (Sweden)

    Aurore Avarguès-Weber

    Full Text Available BACKGROUND: Learning and perception of visual stimuli by free-flying honeybees has been shown to vary dramatically depending on the way insects are trained. Fine color discrimination is achieved when both a target and a distractor are present during training (differential conditioning, whilst if the same target is learnt in isolation (absolute conditioning, discrimination is coarse and limited to perceptually dissimilar alternatives. Another way to potentially enhance discrimination is to increase the penalty associated with the distractor. Here we studied whether coupling the distractor with a highly concentrated quinine solution improves color discrimination of both similar and dissimilar colors by free-flying honeybees. As we assumed that quinine acts as an aversive stimulus, we analyzed whether aversion, if any, is based on an aversive sensory input at the gustatory level or on a post-ingestional malaise following quinine feeding. METHODOLOGY/PRINCIPAL FINDINGS: We show that the presence of a highly concentrated quinine solution (60 mM acts as an aversive reinforcer promoting rejection of the target associated with it, and improving discrimination of perceptually similar stimuli but not of dissimilar stimuli. Free-flying bees did not use remote cues to detect the presence of quinine solution; the aversive effect exerted by this substance was mediated via a gustatory input, i.e. via a distasteful sensory experience, rather than via a post-ingestional malaise. CONCLUSION: The present study supports the hypothesis that aversion conditioning is important for understanding how and what animals perceive and learn. By using this form of conditioning coupled with appetitive conditioning in the framework of a differential conditioning procedure, it is possible to uncover discrimination capabilities that may remain otherwise unsuspected. We show, therefore, that visual discrimination is not an absolute phenomenon but can be modulated by experience.

  17. Effects of pharmacological manipulation of the kappa opioid receptors on the aversive effects of nicotine.

    Science.gov (United States)

    Ward, Melissa; Norman, Haval; D'Souza, Manoranjan S

    2018-02-15

    Nicotine, an addictive component of tobacco smoke, produces both rewarding and aversive effects. Increasing the aversive effects of nicotine may help in promoting smoking cessation. However, neural targets mediating the aversive effects of nicotine have not been fully identified. In this study, we evaluated the role of kappa opioid receptors (KORs) in the aversive effects of nicotine (0.4 mg/kg, base; s.c.) using the nicotine-induced conditioned taste aversion (CTA) model in Wistar rats. The KORs were activated using the selective KOR agonist (±)U-50,488H (0, 0.03, 0.15 & 0.3mg/kg; s.c.) and inhibited using the KOR antagonist nor-binaltorphimine (nor-BNI; 0, 15 & 30mg/kg; s.c.) in separate groups of rats using a between-subjects design. Pretreatment with the KOR agonist (±)U-50,488H (0.3mg/kg) significantly increased aversion for the nicotine-associated solution. Additionally, (±)U-50,488H (0.3mg/kg) on its own induced aversion to the flavored solution associated with it even in the absence of nicotine, suggesting that the KOR agonist induced increase in nicotine-induced aversion was an additive effect. Interestingly, administration of the KOR antagonist nor-BNI (30mg/kg) prior to conditioning with nicotine/saline, but not after conditioning with nicotine/saline, attenuated nicotine-induced aversive effects compared to saline controls. Taken together, these data suggest a role for KORs in the aversive effects of nicotine. Copyright © 2017 Elsevier B.V. All rights reserved.

  18. Aversive Stimulation -- Criteria for Application.

    Science.gov (United States)

    O'Donnell, Patrick A.; Ohlson, Glenn A.

    Criteria for applying aversive stimulation with severely handicapped children are examined, and practical and ethical issues are considered. Factors seen to influence punishment outcomes include timing, intensity, and schedule of reinforcement. Suggested is the need for further research on the comparative effectiveness of positive and negative…

  19. Risk Aversion in Game Shows

    DEFF Research Database (Denmark)

    Andersen, Steffen; Harrison, Glenn W.; Lau, Morten I.

    2008-01-01

    We review the use of behavior from television game shows to infer risk attitudes. These shows provide evidence when contestants are making decisions over very large stakes, and in a replicated, structured way. Inferences are generally confounded by the subjective assessment of skill in some games......, and the dynamic nature of the task in most games. We consider the game shows Card Sharks, Jeopardy!, Lingo, and finally Deal Or No Deal. We provide a detailed case study of the analyses of Deal Or No Deal, since it is suitable for inference about risk attitudes and has attracted considerable attention....

  20. Amygdala signals subjective appetitiveness and aversiveness of mixed gambles

    DEFF Research Database (Denmark)

    Gelskov, Sofie V.; Henningsson, Susanne; Madsen, Kristoffer Hougaard

    2015-01-01

    People are more sensitive to losses than to equivalent gains when making financial decisions. We used functional magnetic resonance imaging (fMRI) to illuminate how the amygdala contributes to loss aversion. The blood oxygen level dependent (BOLD) response of the amygdala was mapped while healthy...... individuals were responding to 50/50 gambles with varying potential gain and loss amounts. Overall, subjects demanded twice as high potential gain as loss to accept a gamble. The individual level of loss aversion was expressed by the decision boundary, i.e., the gain-loss ratio at which subjects accepted...... and rejected gambles with equal probability. Amygdala activity increased the more the gain-loss ratio deviated from the individual decision boundary showing that the amygdala codes action value. This response pattern was more strongly expressed in loss aversive individuals, linking amygdala activity...

  1. Investigating the Effect of Consumer’s Risk Aversion and Product Involvement on their Brand Loyalty and Word of Mouth Behavior: The Mediating Role of Brand Attachment and Brand Trust

    OpenAIRE

    Manijeh Bahrainizadeh; Alireza Ziaei Bide

    2013-01-01

    In today’s highly competitive markets, brand loyalty is a central element of marketing strategies and tactics. Therefore, the sources of loyalty and the processes through which it is established is becoming central concern of marketers. The purpose of this study is to explore the relationship between the consumer’s risk aversion and product involvement with their brand loyalty and positive word of mouth behaviors and also to test empirically whether this relationship is mediated by brand trus...

  2. Appetitive but Not Aversive Olfactory Conditioning Modifies Antennal Movements in Honeybees

    Science.gov (United States)

    Cholé, Hanna; Junca, Pierre; Sandoz, Jean-Christophe

    2015-01-01

    In honeybees, two olfactory conditioning protocols allow the study of appetitive and aversive Pavlovian associations. Appetitive conditioning of the proboscis extension response (PER) involves associating an odor, the conditioned stimulus (CS) with a sucrose solution, the unconditioned stimulus (US). Conversely, aversive conditioning of the sting…

  3. Choice by value encoding and value construction : processes of loss aversion

    NARCIS (Netherlands)

    Willemsen, M.C.; Boeckenholt, U.; Johnson, E.J.

    2011-01-01

    Loss aversion and reference dependence are 2 keystones of behavioral theories of choice, but little is known about their underlying cognitive processes. We suggest an additional account for loss aversion that supplements the current account of the value encoding of attributes as gains or losses

  4. Conditioned taste aversion, drugs of abuse and palatability.

    Science.gov (United States)

    Lin, Jian-You; Arthurs, Joe; Reilly, Steve

    2014-09-01

    We consider conditioned taste aversion to involve a learned reduction in the palatability of a taste (and hence in amount consumed) based on the association that develops when a taste experience is followed by gastrointestinal malaise. The present article evaluates the well-established finding that drugs of abuse, at doses that are otherwise considered rewarding and self-administered, cause intake suppression. Our recent work using lick pattern analysis shows that drugs of abuse also cause a palatability downshift and, therefore, support conditioned taste aversion learning. Copyright © 2014 Elsevier Ltd. All rights reserved.

  5. Risk seeking for losses modulates the functional connectivity of the default mode and left frontoparietal networks in young males.

    Science.gov (United States)

    Deza Araujo, Yacila I; Nebe, Stephan; Neukam, Philipp T; Pooseh, Shakoor; Sebold, Miriam; Garbusow, Maria; Heinz, Andreas; Smolka, Michael N

    2018-06-01

    Value-based decision making (VBDM) is a principle that states that humans and other species adapt their behavior according to the dynamic subjective values of the chosen or unchosen options. The neural bases of this process have been extensively investigated using task-based fMRI and lesion studies. However, the growing field of resting-state functional connectivity (RSFC) may shed light on the organization and function of brain connections across different decision-making domains. With this aim, we used independent component analysis to study the brain network dynamics in a large cohort of young males (N = 145) and the relationship of these dynamics with VBDM. Participants completed a battery of behavioral tests that evaluated delay aversion, risk seeking for losses, risk aversion for gains, and loss aversion, followed by an RSFC scan session. We identified a set of large-scale brain networks and conducted our analysis only on the default mode network (DMN) and networks comprising cognitive control, appetitive-driven, and reward-processing regions. Higher risk seeking for losses was associated with increased connectivity between medial temporal regions, frontal regions, and the DMN. Higher risk seeking for losses was also associated with increased coupling between the left frontoparietal network and occipital cortices. These associations illustrate the participation of brain regions involved in prospective thinking, affective decision making, and visual processing in participants who are greater risk-seekers, and they demonstrate the sensitivity of RSFC to detect brain connectivity differences associated with distinct VBDM parameters.

  6. Risk Acceptance Criteria and/or Decision optimization

    DEFF Research Database (Denmark)

    Ditlevsen, Ove Dalager

    1996-01-01

    Acceptance criteria applied in practical risk analysis are recapitulated including the concept of rist profile. Modelling of risk profiles is illustrated on the basis of compound Poisson process models. The current practice of authoritative acceptance criteria formulation is discussed from...... a decision theoretical point of view. It is argued that the phenomenon of risk aversion rather than being of concern to the authority should be of concern to the owner. Finally it is discussed whether there is an ethical problem when formally capitalising human lives with a positive interest rate. Keywords......: Risk acceptance, Risk profile, Compound Poisson model for risk profile, Capitalization of human life, Risk aversion....

  7. Taste aversion learning produced by combined treatment with subthreshold radiation and lithium chloride

    International Nuclear Information System (INIS)

    Rabin, B.M.; Hunt, W.A.; Lee, J.

    1987-01-01

    These experiments were designed to determine whether treatment with two subthreshold doses of radiation or lithium chloride, either alone or in combination, could lead to taste aversion learning. The first experiment determined the thresholds for a radiation-induced taste aversion at 15-20 rad and for lithium chloride at 0.30-0.45 mEq/kg. In the second experiment it was shown that exposing rats to two doses of 15 rad separated by up to 3 hr produced a taste aversion. Treatment with two injections of lithium chloride (0.30 mEq/kg) did not produce a significant reduction in preference. Combined treatment with radiation and lithium chloride did produce a taste aversion when the two treatments were administered within 1 hr of each other. The results are discussed in terms of the implications of these findings for understanding the nature of the unconditioned stimuli leading to the acquisition of a conditioned taste aversion

  8. Uncertainty, loss aversion, and markets for energy efficiency

    International Nuclear Information System (INIS)

    Greene, David L.

    2011-01-01

    Increasing energy efficiency is critical to mitigating greenhouse gas emissions from fossil-fuel combustion, reducing oil dependence, and achieving a sustainable global energy system. The tendency of markets to neglect apparently cost-effective energy efficiency options has been called the 'efficiency gap' or 'energy paradox.' The market for energy efficiency in new, energy-using durable goods, however, appears to have a bias that leads to undervaluation of future energy savings relative to their expected value. This paper argues that the bias is chiefly produced by the combination of substantial uncertainty about the net value of future fuel savings and the loss aversion of typical consumers. This framework relies on the theory of context-dependent preferences. The uncertainty-loss aversion bias against energy efficiency is quantifiable, making it potentially correctible by policy measures. The welfare economics of such policies remains unresolved. Data on the costs of increased fuel economy of new passenger cars, taken from a National Research Council study, illustrate how an apparently cost-effective increase in energy efficiency would be uninteresting to loss-averse consumers.

  9. Onset and Offset of Aversive Events Establish Distinct Memories Requiring Fear and Reward Networks

    Science.gov (United States)

    Andreatta, Marta; Fendt, Markus; Muhlberger, Andreas; Wieser, Matthias J.; Imobersteg, Stefan; Yarali, Ayse; Gerber, Bertram; Pauli, Paul

    2012-01-01

    Two things are worth remembering about an aversive event: What made it happen? What made it cease? If a stimulus precedes an aversive event, it becomes a signal for threat and will later elicit behavior indicating conditioned fear. However, if the stimulus is presented upon cessation of the aversive event, it elicits behavior indicating…

  10. Taste aversion memory reconsolidation is independent of its retrieval.

    Science.gov (United States)

    Rodriguez-Ortiz, Carlos J; Balderas, Israela; Garcia-DeLaTorre, Paola; Bermudez-Rattoni, Federico

    2012-10-01

    Reconsolidation refers to the destabilization/re-stabilization memory process upon its activation. However, the conditions needed to undergo reconsolidation, as well as its functional significance is quite unclear and a matter of intense investigation. Even so, memory retrieval is held as requisite to initiate reconsolidation. Therefore, in the present work we examined whether transient pharmacological disruption of memory retrieval impedes reconsolidation of stored memory in the widely used associative conditioning task, taste aversion. We found that AMPA receptors inhibition in the amygdala impaired retrieval of taste aversion memory. Furthermore, AMPA receptors blockade impeded retrieval regardless of memory strength. However, inhibition of retrieval did not affect anisomycin-mediated disruption of reconsolidation. These results indicate that retrieval is a dispensable condition to undergo reconsolidation and provide evidence of molecular dissociation between retrieval and activation of memory in the non-declarative memory model taste aversion. Copyright © 2012 Elsevier Inc. All rights reserved.

  11. Fractional-moment CAPM with loss aversion

    Energy Technology Data Exchange (ETDEWEB)

    Wu Yahao [Dep. of Math., South China University of Technology, Guangzhou 510640 (China); Wang Xiaotian [Dep. of Math., South China University of Technology, Guangzhou 510640 (China)], E-mail: swa001@126.com; Wu Min [Dep. of Math., South China University of Technology, Guangzhou 510640 (China)

    2009-11-15

    In this paper, we present a new fractional-order value function which generalizes the value function of Kahneman and Tversky [Kahneman D, Tversky A. Prospect theory: an analysis of decision under risk. Econometrica 1979;47:263-91; Tversky A, Kahneman D. Advances in prospect theory: cumulative representation of uncertainty. J. Risk Uncertainty 1992;4:297-323], and give the corresponding fractional-moment versions of CAPM in the cases of both the prospect theory [Kahneman D, Tversky A. Prospect theory: an analysis of decision under risk. Econometrica 1979;47:263-91; Tversky A, Kahneman D. Advances in prospect theory: cumulative representation of uncertainty. J. Risk Uncertainty 1992;4:297-323] and the expected utility model. The models that we obtain can be used to price assets when asset return distributions are likely to be asymmetric stable Levy distribution during panics and stampedes in worldwide security markets in 2008. In particular, from the prospect theory we get the following fractional-moment CAPM with loss aversion: E(R{sub i}-R{sub 0})=(E[(W-W{sub 0}){sub +}{sup -0.12}(R{sub i}-R{sub 0})]+2.25E[(W{sub 0}-W){sub +}{sup -0.12}(R{sub i}-R{sub 0})])/ (E[(W-W{sub 0}){sub +}{sup -0.12} (W-R{sub 0})]+2.25E[(W{sub 0}-W){sub +}{sup -0.12}(W-R{sub 0})]) .E(W-R{sub 0}), where W{sub 0} is a fixed reference point distinguishing between losses and gains.

  12. Investors’ Risk Preference Characteristics and Conditional Skewness

    Directory of Open Access Journals (Sweden)

    Fenghua Wen

    2014-01-01

    Full Text Available Perspective on behavioral finance, we take a new look at the characteristics of investors’ risk preference, building the D-GARCH-M model, DR-GARCH-M model, and GARCHC-M model to investigate their changes with states of gain and loss and values of return together with other time-varying characteristics of investors’ risk preference. Based on a full description of risk preference characteristic, we develop a GARCHCS-M model to study its effect on the return skewness. The top ten market value stock composite indexes from Global Stock Exchange in 2012 are adopted to make the empirical analysis. The results show that investors are risk aversion when they gain and risk seeking when they lose, which effectively explains the inconsistent risk-return relationship. Moreover, the degree of risk aversion rises with the increasing gain and that of risk seeking improves with the increasing losses. Meanwhile, we find that investors’ inherent risk preference in most countries displays risk seeking, and their current risk preference is influenced by last period’s risk preference and disturbances. At last, investors’ risk preferences affect the conditional skewness; specifically, their risk aversion makes return skewness reduce, while risk seeking makes the skewness increase.

  13. Risk management and corporate value

    Directory of Open Access Journals (Sweden)

    Milan Cupic

    2015-12-01

    Full Text Available The paper presents a theoretical framework for assessing the impact of risk management on corporate value. As the relevant factors that determine this impact, the paper analyzes market imperfections and investors’ risk aversion. The results of the present research indicate that risk management contributes to an increase in corporate value if, under the influence of market imperfections, corporate risk exposure is concave. As an expression of market imperfections, the paper analyzes the costs of financial distress, agency costs, and taxation. The results of the research also indicate that the risk management policy should not aim to minimize, but rather optimize risk exposure, by taking into account the costs of risk management, investors’ risk aversion and the competitive advantage a corporation has on the relevant market.

  14. Amygdala activity related to enhanced memory for pleasant and aversive stimuli.

    Science.gov (United States)

    Hamann, S B; Ely, T D; Grafton, S T; Kilts, C D

    1999-03-01

    Pleasant or aversive events are better remembered than neutral events. Emotional enhancement of episodic memory has been linked to the amygdala in animal and neuropsychological studies. Using positron emission tomography, we show that bilateral amygdala activity during memory encoding is correlated with enhanced episodic recognition memory for both pleasant and aversive visual stimuli relative to neutral stimuli, and that this relationship is specific to emotional stimuli. Furthermore, data suggest that the amygdala enhances episodic memory in part through modulation of hippocampal activity. The human amygdala seems to modulate the strength of conscious memory for events according to emotional importance, regardless of whether the emotion is pleasant or aversive.

  15. Rewarding and aversive effects of nicotine are segregated within the nucleus accumbens.

    Science.gov (United States)

    Sellings, Laurie H L; Baharnouri, Golriz; McQuade, Lindsey E; Clarke, Paul B S

    2008-07-01

    Forebrain dopamine plays a critical role in motivated behavior. According to the classic view, mesolimbic dopamine selectively guides behavior motivated by positive reinforcers. However, this has been challenged in favor of a wider role encompassing aversively motivated behavior. This controversy is particularly striking in the case of nicotine, with opposing claims that either the rewarding or the aversive effect of nicotine is critically dependent on mesolimbic dopamine transmission. In the present study, the effects of 6-hydroxydopamine lesions of nucleus accumbens core vs. medial shell on intravenous nicotine conditioned place preference and conditioned taste aversion were examined in male adult rats. Dopaminergic denervation in accumbens medial shell was associated with decreased nicotine conditioned place preference. Conversely, denervation in accumbens core was associated with an increase in conditioned place preference. In addition, dopaminergic denervation of accumbens core but not medial shell abolished conditioned taste aversion for nicotine. We conclude that nucleus accumbens core and medial shell dopaminergic innervation exert segregated effects on rewarding and aversive effects of nicotine. More generally, our findings indicate that dopaminergic transmission may mediate or enable opposing motivational processes within functionally distinct domains of the accumbens.

  16. Anticipation of high arousal aversive and positive movie clips engages common and distinct neural substrates.

    Science.gov (United States)

    Greenberg, Tsafrir; Carlson, Joshua M; Rubin, Denis; Cha, Jiook; Mujica-Parodi, Lilianne

    2015-04-01

    The neural correlates of anxious anticipation have been primarily studied with aversive and neutral stimuli. In this study, we examined the effect of valence on anticipation by using high arousal aversive and positive stimuli and a condition of uncertainty (i.e. either positive or aversive). The task consisted of predetermined cues warning participants of upcoming aversive, positive, 'uncertain' (either aversive or positive) and neutral movie clips. Anticipation of all affective clips engaged common regions including the anterior insula, dorsal anterior cingulate cortex, thalamus, caudate, inferior parietal and prefrontal cortex that are associated with emotional experience, sustained attention and appraisal. In contrast, the nucleus accumbens and medial prefrontal cortex, regions implicated in reward processing, were selectively engaged during anticipation of positive clips (depicting sexually explicit content) and the mid-insula, which has been linked to processing aversive stimuli, was selectively engaged during anticipation of aversive clips (depicting graphic medical procedures); these three areas were also activated during anticipation of 'uncertain' clips reflecting a broad preparatory response for both aversive and positive stimuli. These results suggest that a common circuitry is recruited in anticipation of affective clips regardless of valence, with additional areas preferentially engaged depending on whether expected stimuli are negative or positive. © The Author (2014). Published by Oxford University Press. For Permissions, please email: journals.permissions@oup.com.

  17. Contrasting role of octopamine in appetitive and aversive learning in the crab Chasmagnathus.

    Directory of Open Access Journals (Sweden)

    Laura Kaczer

    Full Text Available BACKGROUND: Biogenic amines are implicated in reinforcing associative learning. Octopamine (OA is considered the invertebrate counterpart of noradrenaline and several studies in insects converge on the idea that OA mediates the reward in appetitive conditioning. However, it is possible to assume that OA could have a different role in an aversive conditioning. METHODOLOGY/PRINCIPAL FINDINGS: Here we pharmacologically studied the participation of OA in two learning processes in the crab Chasmagnathus granulatus, one appetitive and one aversive. It is shown that the aversive memory is impaired by an OA injection applied immediately or 30 minutes after the last training trial. By contrast, the appetitive memory is blocked by OA antagonists epinastine and mianserine, but enhanced by OA when injected together with the supply of a minimum amount of reinforcement. Finally, double-learning experiments in which crabs are given the aversive and the appetitive learning either successively or simultaneously allow us to study the interaction between both types of learning and analyze the presumed action of OA. We found that the appetitive training offered immediately, but not one hour, after an aversive training has an amnesic effect on the aversive memory, mimicking the effect and the kinetic of an OA injection. CONCLUSIONS/SIGNIFICANCE: Our results demonstrate that the role of OA is divergent in two memory processes of opposite signs: on the one hand it would mediate the reinforcement in appetitive learning, and on the other hand it has a deleterious effect over aversive memory consolidation.

  18. Comparing uncertainty aversion towards different sources

    NARCIS (Netherlands)

    Baillon, Aurélien; Liu, Ning; van Dolder, Dennie

    2017-01-01

    We propose simple behavioral definitions of comparative uncertainty aversion for a single agent towards different sources of uncertainty. Our definitions allow for the comparison of utility curvature for different sources if the agent’s choices satisfy subjective expected utility towards each

  19. Choice by Value Encoding and Value Construction: Processes of Loss Aversion

    Science.gov (United States)

    Willemsen, Martijn C.; Bockenholt, Ulf; Johnson, Eric J.

    2011-01-01

    Loss aversion and reference dependence are 2 keystones of behavioral theories of choice, but little is known about their underlying cognitive processes. We suggest an additional account for loss aversion that supplements the current account of the value encoding of attributes as gains or losses relative to a reference point, introducing a value…

  20. Neural computations underlying social risk sensitivity

    Directory of Open Access Journals (Sweden)

    Nina eLauharatanahirun

    2012-08-01

    Full Text Available Under standard models of expected utility, preferences over stochastic events are assumed to be independent of the source of uncertainty. Thus, in decision-making, an agent should exhibit consistent preferences, regardless of whether the uncertainty derives from the unpredictability of a random process or the unpredictability of a social partner. However, when a social partner is the source of uncertainty, social preferences can influence decisions over and above pure risk attitudes. Here, we compared risk-related hemodynamic activity and individual preferences for two sets of options that differ only in the social or non-social nature of the risk. Risk preferences in social and non-social contexts were systematically related to neural activity during decision and outcome phases of each choice. Individuals who were more risk averse in the social context exhibited decreased risk-related activity in the amygdala during non-social decisions, while individuals who were more risk averse in the non-social context exhibited the opposite pattern. Differential risk preferences were similarly associated with hemodynamic activity in ventral striatum at the outcome of these decisions. These findings suggest that social preferences, including aversion to betrayal or exploitation by social partners, may be associated with variability in the response of these subcortical regions to social risk.

  1. Investigations on UCS-CS mediation in radiation-induced conditioned taste aversion

    International Nuclear Information System (INIS)

    Burns, T.C.

    1974-01-01

    Groups of 8 male Sprague-Dawley rats were used in an investigation of procaine and dimenhydrinate effects on radiation-induced taste aversion learning. Neither the local anesthetic procaine, administered intraperitoneally, nor the antinausea drug dimenhydrinate, administered intramuscularly, blocked acquisition of aversion to saccharin flavored water. Control animals confirmed that saccharin preferences appeared normally in non-irradiated animals, and that the drugs produced no aversion in the absence of radiation. Another investigation, using groups of 5 female Sprague-Dawley rats, showed a failure of dimenhydrinate in blocking the acquisition of a rotation-induced conditioned taste aversion. Two dose levels of the drug were used, 1 mg/kg and 2 mg/kg. At the dimenhydrinate dosage used in the study involving radiation (1.75 mg/kg) and at the higher dosage used in the study involving rotation, there appeared to be a potentiation of the effects of radiation and rotation, respectively. Results of these studies seem to favor a model for UCS-CS mediation as being diffuse and perhaps redundant. The possibility that nausea-producing stimuli may work synergistically was also discussed. (U.S.)

  2. Oxytocin attenuates aversive response to nicotine and anxiety-like behavior in adolescent rats.

    Science.gov (United States)

    Lee, Hyunchan; Jang, Minji; Noh, Jihyun

    2017-02-01

    Initial tobacco use is initiated with rewarding and aversive properties of nicotine and aversive response to nicotine plays a critical role in nicotine dependency. Decrease of nicotine aversion increases the nicotine use that causes behavioral and neuronal changes of animals. Oxytocin influences drug abuse and reciprocally affect vulnerability to drug use. To assess the effect of oxytocin on initial nicotine aversion and anxiety, we examined voluntary oral nicotine intake and anxiety-like behavior following oxytocin treatment in adolescent rats. Sprague-Dawley male rats (4 weeks old) were used. For oxytocin administration, rats were injected subcutaneously with saline or oxytocin (0.01, 0.1 and 1mg/kg) according to the assigned groups. Voluntary oral nicotine consumption test was performed by two bottle free-choice paradigm. To examine anxiety-like behavior in rats, we performed a light/dark box test. Oxytocin not only significantly increased the nicotine intake but also alleviated nicotine aversion after acclimation to nicotine solution in a concentration dependent manner. Meanwhile, oxytocin significantly reduced anxiety-like behavior. We suggest that oxytocin itself mitigates aversive response toward initial nicotine intake and anxiety-like behavior. These results widen the psychophysiological perspective on oxytocin for better understanding of nicotine addiction related behaviors influenced by diverse social factors. Copyright © 2016 Elsevier Ireland Ltd and Japan Neuroscience Society. All rights reserved.

  3. Loss Aversion in the Classroom: A Nudge towards a Better Grade?

    Science.gov (United States)

    Grijalva, Therese; Koford, Brandon C.; Parkhurst, Gregory

    2018-01-01

    Using data from 499 students over 12 sections, 2 courses, and 3 instructors, we estimate the effect of loss aversion on the probability of turning in extra credit assignments and the effect on the overall grade. Regression results indicate no effect of loss aversion on the probability of turning in extra credit assignments and no effect on a…

  4. Emotion-induced loss aversion and striatal-amygdala coupling in low-anxious individuals.

    Science.gov (United States)

    Charpentier, Caroline J; De Martino, Benedetto; Sim, Alena L; Sharot, Tali; Roiser, Jonathan P

    2016-04-01

    Adapting behavior to changes in the environment is a crucial ability for survival but such adaptation varies widely across individuals. Here, we asked how humans alter their economic decision-making in response to emotional cues, and whether this is related to trait anxiety. Developing an emotional decision-making task for functional magnetic resonance imaging, in which gambling decisions were preceded by emotional and non-emotional primes, we assessed emotional influences on loss aversion, the tendency to overweigh potential monetary losses relative to gains. Our behavioral results revealed that only low-anxious individuals exhibited increased loss aversion under emotional conditions. This emotional modulation of decision-making was accompanied by a corresponding emotion-elicited increase in amygdala-striatal functional connectivity, which correlated with the behavioral effect across participants. Consistent with prior reports of 'neural loss aversion', both amygdala and ventral striatum tracked losses more strongly than gains, and amygdala loss aversion signals were exaggerated by emotion, suggesting a potential role for this structure in integrating value and emotion cues. Increased loss aversion and striatal-amygdala coupling induced by emotional cues may reflect the engagement of adaptive harm-avoidance mechanisms in low-anxious individuals, possibly promoting resilience to psychopathology. © The Author (2015). Published by Oxford University Press.

  5. Increased dopaminergic signaling impairs aversive olfactory memory retention in Drosophila.

    Science.gov (United States)

    Zhang, Shixing; Yin, Yan; Lu, Huimin; Guo, Aike

    2008-05-23

    Dopamine is necessary for the aversive olfactory associative memory formation in Drosophila, but its effect on other stages of memory is not known. Herein, we studied the effect of enhanced dopaminergic signaling on aversive olfactory memory retention in flies. We used l-3,4-dihydroxyphenylalanine (l-DOPA) to elevate dopamine levels: l-DOPA-treated flies exhibited a normal learning performance, but a decrease in 1-h memory. Dopamine transporter (DAT) mutant flies or flies treated with the DAT inhibitor desipramine exhibited poor memory retention. Flies subjected to heat stress after training exhibited a decrease in memory. Memory was restored by blocking dopaminergic neuronal output during heat stress, suggesting that dopamine is involved in heat stress-induced memory impairment in flies. Taken together, our findings suggest that increased dopaminergic signaling impairs aversive olfactory memory retention in flies.

  6. Recursive inter-generational utility in global climate risk modeling

    Energy Technology Data Exchange (ETDEWEB)

    Minh, Ha-Duong [Centre International de Recherche sur l' Environnement et le Developpement (CIRED-CNRS), 75 - Paris (France); Treich, N. [Institut National de Recherches Agronomiques (INRA-LEERNA), 31 - Toulouse (France)

    2003-07-01

    This paper distinguishes relative risk aversion and resistance to inter-temporal substitution in climate risk modeling. Stochastic recursive preferences are introduced in a stylized numeric climate-economy model using preliminary IPCC 1998 scenarios. It shows that higher risk aversion increases the optimal carbon tax. Higher resistance to inter-temporal substitution alone has the same effect as increasing the discount rate, provided that the risk is not too large. We discuss implications of these findings for the debate upon discounting and sustainability under uncertainty. (author)

  7. Effects of subdiaphragmatic vagotomy on the acquisition of a radiation-induced conditioned taste aversion

    International Nuclear Information System (INIS)

    Hunt, W.A.; Rabin, B.M.; Lee, J.

    1987-01-01

    The effect of subdiaphragmatic vagotomy on the acquisition of a radiation-induced taste aversion was examined to assess the importance of the vagus nerve in transmitting information on the peripheral toxicity of radiation to the brain. Vagotomy had no effect on taste aversion learning, consistent with reports using other toxins. The data support the involvement of a blood-borne factor in the acquisition of taste aversion induced by ionizing radiation

  8. Greater general startle reflex is associated with greater anxiety levels: a correlational study on 111 young women

    Directory of Open Access Journals (Sweden)

    Eleonora ePoli

    2015-02-01

    Full Text Available Startle eyeblink reflex is a valid non-invasive tool for studying attention, emotion and psychiatric disorders. In the absence of any experimental manipulation, the general (or baseline startle reflex shows a high inter-individual variability, which is often considered task-irrelevant and therefore normalized across participants. Unlike the above view, we hypothesized that greater general startle magnitude is related to participants’ higher anxiety level. 111 healthy young women, after completing the State-Trait Anxiety Inventory, were randomly administered 10 acoustic white noise probes (50 ms, 100 dBA acoustic level while integrated EMG from left and right orbicularis oculi was recorded. Results showed that participants with greater state anxiety levels exhibited larger startle reflex magnitude from the left eye (r109=0.23, p<0.05. Furthermore, individuals who perceived the acoustic probe as more aversive reported the largest anxiety scores (r109=0.28, p<0.05 and had the largest eyeblinks, especially in the left eye (r109 = 0.34, p<0.001. Results suggest that general startle may represent a valid tool for studying the neural excitability underlying anxiety and emotional dysfunction in neurological and mental disorders.

  9. Modulation of the conflict monitoring intensity: the role of aversive reinforcement, cognitive demand, and trait-BIS.

    Science.gov (United States)

    Leue, Anja; Lange, Sebastian; Beauducel, André

    2012-06-01

    According to Botvinick's (2007) integrative account, conflict monitoring is aversive because individuals anticipate cognitive demand, whereas the revised reinforcement sensitivity theory (rRST) predicts that conflict processing is aversive because individuals anticipate aversive reinforcement of erroneous responses. Because these accounts give different reasons for the aversive aspects of conflict, we manipulated cognitive demand and the aversive reinforcement as a consequence of wrong choices in a go/no-go task. Thereby, we also aimed to investigate whether individual differences in conflict sensitivity (i.e., in trait anxiety, linked to high sensitivity of the behavioral inhibition system [trait-BIS]) represent the effects of aversive reinforcement and cognitive demand in conflict tasks. We expected that these manipulations would have effects on the frontal N2 component representing activity of the anterior cingulate cortex. Moreover, higher-trait-BIS individuals should be more sensitive than lower-trait-BIS individuals to aversive effects in conflict situations, resulting in a more negative frontal N2 for higher-trait-BIS individuals. In Study 1, with N = 104 students, and Study 2, with N = 47 students, aversive reinforcement was manipulated in three levels (within-subjects factor) and cognitive demand in two levels (between-subjects factor). The behavioral findings from the go/no-go task with noncounterbalanced reinforcement levels (Study 1) could be widely replicated in a task with counterbalanced reinforcement levels (Study 2). The frontal mean no-go N2 amplitude and the frontal no-go N2 dipole captured predicted reinforcement-related variations of conflict monitoring, indicating that the anticipation of aversive reinforcement induces variations in conflict monitoring intensity in frontal brain areas. The aversive nature of conflict was underlined by the more pronounced conflict monitoring in higher- than in lower-trait-BIS individuals.

  10. Mothers' depressive symptoms predict both increased and reduced negative reactivity: aversion sensitivity and the regulation of emotion.

    Science.gov (United States)

    Dix, Theodore; Moed, Anat; Anderson, Edward R

    2014-07-01

    This study examined whether, as mothers' depressive symptoms increase, their expressions of negative emotion to children increasingly reflect aversion sensitivity and motivation to minimize ongoing stress or discomfort. In multiple interactions over 2 years, negative affect expressed by 319 mothers and their children was observed across variations in mothers' depressive symptoms, the aversiveness of children's immediate behavior, and observed differences in children's general negative reactivity. As expected, depressive symptoms predicted reduced maternal negative reactivity when child behavior was low in aversiveness, particularly with children who were high in negative reactivity. Depressive symptoms predicted high negative reactivity and steep increases in negative reactivity as the aversiveness of child behavior increased, particularly when high and continued aversiveness from the child was expected (i.e., children were high in negative reactivity). The findings are consistent with the proposal that deficits in parenting competence as depressive symptoms increase reflect aversion sensitivity and motivation to avoid conflict and suppress children's aversive behavior. © The Author(s) 2014.

  11. Contrasting Effects of Histone Deacetylase Inhibitors on Reward and Aversive Olfactory Memories in the Honey Bee

    Directory of Open Access Journals (Sweden)

    Gabrielle A Lockett

    2014-06-01

    Full Text Available Much of what we have learnt from rodent models about the essential role of epigenetic processes in brain plasticity has made use of aversive learning, yet the role of histone acetylation in aversive memory in the honey bee, a popular invertebrate model for both memory and epigenetics, was previously unknown. We examined the effects of histone deacetylase (HDAC inhibition on both aversive and reward olfactory associative learning in a discrimination proboscis extension reflex (PER assay. We report that treatment with the HDAC inhibitors APHA compound 8 (C8, phenylbutyrate (PB or sodium butyrate (NaB impaired discrimination memory due to impairment of aversive memory in a dose-dependent manner, while simultaneously having no effect on reward memory. Treatment with C8 1 h before training, 1 h after training or 1 h before testing, impaired aversive but not reward memory at test. C8 treatment 1 h before training also improved aversive but not reward learning during training. PB treatment only impaired aversive memory at test when administered 1 h after training, suggesting an effect on memory consolidation specifically. Specific impairment of aversive memory (but not reward memory by HDAC inhibiting compounds was robust, reproducible, occurred following treatment with three drugs targeting the same mechanism, and is likely to be genuinely due to alterations to memory as sucrose sensitivity and locomotion were unaffected by HDAC inhibitor treatment. This pharmacological dissection of memory highlights the involvement of histone acetylation in aversive memory in the honey bee, and expands our knowledge of epigenetic control of neural plasticity in invertebrates.

  12. Risk aversion and social networks

    NARCIS (Netherlands)

    Kovarik, J.; van der Leij, M.J.

    2011-01-01

    Agents involved in the formation of a social or economic network typically face uncertainty about the benefits of creating a link. However, the interplay of such uncertainty and risk attitudes has been neglected in the network formation literature. We propose a dynamic network formation model that

  13. Risk aversion and social networks

    NARCIS (Netherlands)

    Kovářík, J.; van der Leij, M.J.

    2012-01-01

    Agents involved in the formation of a social or economic network typically face uncertainty about the benefits of creating a link. However, the interplay of such uncertainty and risk attitudes has been neglected in the network formation literature. We propose a dynamic network formation model that

  14. Analysis of Behavioral Economics in Crowdsensing: A Loss Aversion Cooperation Model

    Directory of Open Access Journals (Sweden)

    Deng Li

    2018-01-01

    Full Text Available The existing incentive mechanisms of crowdsourcing construct the expected utility function based on the assumption of rational people in traditional economics. A large number of studies in behavioral economics have demonstrated the defects of the traditional utility function and introduced a new parameter called loss aversion coefficient to calculate individual utility when it suffers a loss. In this paper, combination of behavioral economics and a payment algorithm based on the loss aversion is proposed. Compared with usual incentive mechanisms, the node utility function is redefined by the loss aversion characteristic of the node. Experimental results show that the proposed algorithm can get a higher rate of cooperation with a lower payment price and has good scalability compared with the traditional incentive mechanism.

  15. Lateral, Not Medial, Prefrontal Cortex Contributes to Punishment and Aversive Instrumental Learning

    Science.gov (United States)

    Jean-Richard-dit-Bressel , Philip; McNally, Gavan P.

    2016-01-01

    Aversive outcomes punish behaviors that cause their occurrence. The prefrontal cortex (PFC) has been implicated in punishment learning and behavior, although the exact roles for different PFC regions in instrumental aversive learning and decision-making remain poorly understood. Here, we assessed the role of the orbitofrontal (OFC), rostral…

  16. Differences between appetitive and aversive reinforcement on reorientation in a spatial working memory task.

    Science.gov (United States)

    Golob, Edward J; Taube, Jeffrey S

    2002-10-17

    Tasks using appetitive reinforcers show that following disorientation rats use the shape of an arena to reorient, and cannot distinguish two geometrically similar corners to obtain a reward, despite the presence of a prominent visual cue that provides information to differentiate the two corners. Other studies show that disorientation impairs performance on certain appetitive, but not aversive, tasks. This study evaluated whether rats would make similar geometric errors in a working memory task that used aversive reinforcement. We hypothesized that in a task that used aversive reinforcement rats that were initially disoriented would not reorient by arena shape and thus make similar geometric errors. Tests were performed in a rectangular arena having one polarizing cue. In the appetitive condition water consumption was the reward. The aversive condition was a water maze task with reinforcement provided by escape to a hidden platform. In the aversive condition rats returned to the reinforced corner significantly more often than in the dry condition, and did not favor the diagonally opposite corner. Results show that rats can use cues besides arena shape to reorient in an aversive reinforcement condition. These findings may also reflect different strategies, with an escape/homing strategy in the wet condition and a foraging strategy in the dry condition.

  17. Higher Pretransplantation Hemoglobin A1c Is Associated With Greater Risk of Posttransplant Diabetes Mellitus

    Directory of Open Access Journals (Sweden)

    Jung-Im Shin

    2017-11-01

    Discussion: Higher pretransplantation HbA1c above 5.4% is independently associated with greater risk of PTDM among kidney transplant recipients. A continuous relationship between pretransplantation HbA1c and risk of PTDM suggests that increased risk starts at HbA1c levels well below current thresholds for prediabetes.

  18. Behavioral and neural correlates of loss aversion and risk avoidance in adolescents and adults.

    Science.gov (United States)

    Barkley-Levenson, Emily E; Van Leijenhorst, Linda; Galván, Adriana

    2013-01-01

    Individuals are frequently faced with risky decisions involving the potential for both gain and loss. Exploring the role of both potential gains and potential losses in predicting risk taking is critical to understanding how adolescents and adults make the choice to engage in or avoid a real-life risk. This study aimed to examine the impact of potential losses as well as gains on adolescent decisions during risky choice in a laboratory task. Adolescent (n=18) and adult (n=16) participants underwent functional magnetic resonance imaging (fMRI) during a mixed gambles task, and completed questionnaires measuring real-world risk-taking behaviors. While potential loss had a significantly greater effect on choice than potential gain in both adolescents and adults and there were no behavioral group differences on the task, adolescents recruited significantly more frontostriatal circuitry than adults when choosing to reject a gamble. During risk-seeking behavior, adolescent activation in medial prefrontal cortex (mPFC) was negatively correlated with self-reported likelihood of risk taking. During risk-avoidant behavior, mPFC activation of in adults was negatively correlated with self-reported benefits of risk-taking. Taken together, these findings reflect different neural patterns during risk-taking and risk-avoidant behaviors in adolescents and adults. Copyright © 2012 Elsevier Ltd. All rights reserved.

  19. Cold or calculating? Reduced activity in the subgenual cingulate cortex reflects decreased emotional aversion to harming in counterintuitive utilitarian judgment

    Science.gov (United States)

    Wiech, Katja; Kahane, Guy; Shackel, Nicholas; Farias, Miguel; Savulescu, Julian; Tracey, Irene

    2013-01-01

    Recent research on moral decision-making has suggested that many common moral judgments are based on immediate intuitions. However, some individuals arrive at highly counterintuitive utilitarian conclusions about when it is permissible to harm other individuals. Such utilitarian judgments have been attributed to effortful reasoning that has overcome our natural emotional aversion to harming others. Recent studies, however, suggest that such utilitarian judgments might also result from a decreased aversion to harming others, due to a deficit in empathic concern and social emotion. The present study investigated the neural basis of such indifference to harming using functional neuroimaging during engagement in moral dilemmas. A tendency to counterintuitive utilitarian judgment was associated both with ‘psychoticism’, a trait associated with a lack of empathic concern and antisocial tendencies, and with ‘need for cognition’, a trait reflecting preference for effortful cognition. Importantly, only psychoticism was also negatively correlated with activation in the subgenual cingulate cortex (SCC), a brain area implicated in empathic concern and social emotions such as guilt, during counterintuitive utilitarian judgments. Our findings suggest that when individuals reach highly counterintuitive utilitarian conclusions, this need not reflect greater engagement in explicit moral deliberation. It may rather reflect a lack of empathic concern, and diminished aversion to harming others. PMID:23280149

  20. Is there a Risk-Return Trade-off across Occupations? Evidence from Spain

    OpenAIRE

    Luis Diaz-Serrano; J. Hartog

    2004-01-01

    We use data from Spain to test for an effect of earnings risk and skewness on individual wages. We carry out separate estimation for men, women, public and private sector employees. In accordance with previous evidence for the US we show the existence of a risk-return trade-off across occupations in the Spanish labour market. These results are in conformity with preferences of risk-averse individuals with decreasing absolute risk aversion.

  1. Loss aversion and duration of residence

    Directory of Open Access Journals (Sweden)

    Philip S. Morrison

    2016-10-01

    Full Text Available Background: Studies of internal migration ask who moves, why they move, and what are the consequences - to themselves, their origin, and their destination. By contrast, studies of those who stay for very long durations are less common, despite the fact that most people move relatively infrequently. Objective: We argue that staying is the dominant, preferred state and that moving is simply an adjustment toward a desired state of stability (or equilibrium. The core of our argument, already recognized in the literature, is that migration is risky. However, we extend the argument to loss aversion as developed within prospect theory. Prospect theory posits that existing possessions, including the dwelling and existing commodities, are attributed a value well beyond their purchase price and that this extends the average period of staying among the loss-averse. Methods: Applying prospect theory has several challenges, including measurement of the reference point and potential degrees of gain and loss households face in deciding to change residence, as well as their own degree of loss aversion. The growing number of large panel sets should make it possible to estimate the degree to which endowment effects are likely to extend durations of residence as predicted by prospect theory. Conclusions: Rational expectations models of mobility focus on the changes in the level of consumption of residential services. By contrast, prospect theory focuses on potential gains and losses relative to the existing dwelling - the reference point. As we confront increasing durations of residence in contemporary society, an application of prospect theory is likely to yield important advantages over existing models of mobility and staying.

  2. Social interaction with non-averse group-mates modifies a learned food aversion in single- and mixed-species groups of tamarins (Saguinus fuscicollis and S. labiatus).

    Science.gov (United States)

    Prescott, M J; Buchanan-Smith, H M; Smith, A C

    2005-04-01

    For social species, being a member of a cohesive group and performing activities as a coordinated unit appear to provide a mechanism for the efficient transmission of information about food. Social learning about food palatability was investigated in two captive primates, Saguinus fuscicollis and S. labiatus, which form stable and cohesive mixed-species groups in the wild. We explored whether an induced food aversion toward a preferred food is modified during and after social interaction with non-averse conspecifics or congeners. Sets of intra- and interspecific pairs were presented with two foods, one of which was considered distasteful by one of the pairs (the other was palatable), and their behavior was compared pre-interaction, during interaction, and post-interaction. For the aversely-conditioned individuals of both species, the change in social context corresponded to a change in their preference for the food that they considered unpalatable, regardless of whether they had interacted with a conspecific or congeneric pair, and the change in food preference was maintained post-interaction. In a control condition, in which averse individuals did not have the opportunity to interact with non-averse animals, S. fuscicollis sampled the preferred food, but not as quickly as when given the opportunity to interact. We conclude that the social learning demonstrated here may allow individual tamarins to track environmental change, such as fruit ripening, more efficiently than asocial learning alone, because social learners can more quickly and safely focus on appropriate behavior by sharing up-to-date foraging information. Furthermore, since the behavior of congeners, as well as conspecifics, acts to influence food choice in a more adaptive direction, social learning about food palatability may be an advantage of mixed-species group formation to tamarins of both species. Copyright 2005 Wiley-Liss, Inc

  3. Engineering Decisions Under Risk-Averseness

    Science.gov (United States)

    2013-12-13

    Y (x′) may be different, especially in the critical upper tail. For example, if Y (x) = g(x,V ) = 100− xV1 − (1− x)V2, where V1 is normally...Econometrica, 47:263–291, 1979. [16] K. Kalinchenko, S. Uryasev, and R.T. Rockafellar. Calibrating risk preferences with generalized CAPM based on mixed

  4. Loss Aversion, Adaptive Beliefs, and Asset Pricing Dynamics

    Directory of Open Access Journals (Sweden)

    Kamal Samy Selim

    2015-01-01

    Full Text Available We study asset pricing dynamics in artificial financial markets model. The financial market is populated with agents following two heterogeneous trading beliefs, the technical and the fundamental prediction rules. Agents switch between trading rules with respect to their past performance. The agents are loss averse over asset price fluctuations. Loss aversion behaviour depends on the past performance of the trading strategies in terms of an evolutionary fitness measure. We propose a novel application of the prospect theory to agent-based modelling, and by simulation, the effect of evolutionary fitness measure on adaptive belief system is investigated. For comparison, we study pricing dynamics of a financial market populated with chartists perceive losses and gains symmetrically. One of our contributions is validating the agent-based models using real financial data of the Egyptian Stock Exchange. We find that our framework can explain important stylized facts in financial time series, such as random walk price behaviour, bubbles and crashes, fat-tailed return distributions, power-law tails in the distribution of returns, excess volatility, volatility clustering, the absence of autocorrelation in raw returns, and the power-law autocorrelations in absolute returns. In addition to this, we find that loss aversion improves market quality and market stability.

  5. On Loss Aversion in Capuchin Monkeys

    Science.gov (United States)

    Silberberg, Alan; Roma, Peter G.; Huntsberry, Mary E.; Warren-Boulton, Frederick R.; Sakagami, Takayuki; Ruggiero, Angela M.; Suomi, Stephen J.

    2008-01-01

    Chen, Lakshminarayanan, and Santos (2006) claim to show in three choice experiments that monkeys react rationally to price and wealth shocks, but, when faced with gambles, display hallmark, human-like biases that include loss aversion. We present three experiments with monkeys and humans consistent with a reinterpretation of their data that…

  6. Peer Passenger Norms and Pressure: Experimental Effects on Simulated Driving Among Teenage Males.

    Science.gov (United States)

    Bingham, C Raymond; Simons-Morton, Bruce G; Pradhan, Anuj K; Li, Kaigang; Almani, Farideh; Falk, Emily B; Shope, Jean T; Buckley, Lisa; Ouimet, Marie Claude; Albert, Paul S

    2016-08-01

    Serious crashes are more likely when teenage drivers have teenage passengers. One likely source of this increased risk is social influences on driving performance. This driving simulator study experimentally tested the effects of peer influence (i.e., risk-accepting compared to risk-averse peer norms reinforced by pressure) on the driving risk behavior (i.e., risky driving behavior and inattention to hazards) of male teenagers. It was hypothesized that peer presence would result in greater driving risk behavior (i.e., increased driving risk and reduced latent hazard anticipation), and that the effect would be greater when the peer was risk-accepting. Fifty-three 16- and 17-year-old male participants holding a provisional U.S., State of Michigan driver license were randomized to either a risk-accepting or risk-averse condition. Each participant operated a driving simulator while alone and separately with a confederate peer passenger. The simulator world included scenarios designed to elicit variation in driving risk behavior with a teen passenger present in the vehicle. Significant interactions of passenger presence (passenger present vs. alone) by risk condition (risk-accepting vs. risk-averse) were observed for variables measuring: failure to stop at yellow light intersections (Incident Rate Ratio (IRR)=2.16; 95% Confidence Interval [95CI]=1.06, 4.43); higher probability of overtaking (IRR=10.17; 95CI=1.43, 73.35); shorter left turn latency (IRR=0.43; 95CI=0.31,0.60); and, failure to stop at an intersection with an occluded stop sign (IRR=7.90; 95CI=2.06,30.35). In all cases, greater risky driving by participants was more likely with a risk-accepting passenger versus a risk-averse passenger present and a risk-accepting passenger present versus driving alone. Exposure of male teenagers to a risk-accepting confederate peer passenger who applied peer influence increased simulated risky driving behavior compared with exposure to a risk-averse confederate peer

  7. Conditioned taste aversion to ethanol in a social context: impact of age and sex.

    Science.gov (United States)

    Morales, Melissa; Schatz, Kelcie C; Anderson, Rachel I; Spear, Linda P; Varlinskaya, Elena I

    2014-03-15

    Given that human adolescents place a high value on social interactions-particularly while consuming alcohol-the current study utilized a novel social drinking paradigm to examine rewarding and aversive properties of ethanol in non-water deprived rats that were housed and tested in groups of five same-sex littermates. On postnatal day P34 (adolescents) or P69 (adults), rats were habituated to the testing apparatus for 30 min. On the next day, animals were placed into the test apparatus and given 30 min access to a supersaccharin solution (3% sucrose; 0.125% saccharin), followed immediately by an intraperitoneal injection of ethanol (0, 0.25, 0.5, 1.0, 1.5 g/kg). Subsequent intake of the supersacharrin solution was assessed on three consecutive test days. Adolescent males were less sensitive to ethanol's aversive effects than adult males, with adolescent males maintaining an aversion on all three test days only at the 1.5 g/kg dose, whereas adults demonstrated aversions across test days to 1 and 1.5 g/kg. Adolescent females maintained aversions to 1 and 1.5 g/kg across days, whereas adult females continued to show an aversion to the 1.5 g/kg dose only. These opposite patterns of sensitivity that emerged among males and females at each age in the propensity to maintain an ethanol-induced taste aversion under social conditions may contribute to age- and sex-related differences in ethanol intake. Testing in social groups may be useful for future work when studying rodent models of adolescent alcohol use given the importance that human adolescents place on drinking in social settings. Copyright © 2014 Elsevier B.V. All rights reserved.

  8. Economic decisions for others: an exception to loss aversion law.

    Directory of Open Access Journals (Sweden)

    Flavia Mengarelli

    Full Text Available In everyday life, people often make decisions on behalf of others. The current study investigates whether risk preferences of decision-makers differ when the reference point is no longer their own money but somebody else money. Thirty four healthy participants performed three different monetary risky choices tasks by making decisions for oneself and for another unknown person. Results showed that loss aversion bias was significantly reduced when participants were choosing on behalf of another person compared to when choosing for themselves. The influence of emotions like regret on decision-making may explain these results. We discuss the importance of the sense of responsibility embodied in the emotion of regret in modulating economic decisions for self but not for others. Moreover, our findings are consistent with the Risk-as-feelings hypothesis, suggesting that self-other asymmetrical behavior is due to the extent the decision-maker is affected by the real and emotional consequences of his/her decision.

  9. Economic decisions for others: an exception to loss aversion law.

    Science.gov (United States)

    Mengarelli, Flavia; Moretti, Laura; Faralla, Valeria; Vindras, Philippe; Sirigu, Angela

    2014-01-01

    In everyday life, people often make decisions on behalf of others. The current study investigates whether risk preferences of decision-makers differ when the reference point is no longer their own money but somebody else money. Thirty four healthy participants performed three different monetary risky choices tasks by making decisions for oneself and for another unknown person. Results showed that loss aversion bias was significantly reduced when participants were choosing on behalf of another person compared to when choosing for themselves. The influence of emotions like regret on decision-making may explain these results. We discuss the importance of the sense of responsibility embodied in the emotion of regret in modulating economic decisions for self but not for others. Moreover, our findings are consistent with the Risk-as-feelings hypothesis, suggesting that self-other asymmetrical behavior is due to the extent the decision-maker is affected by the real and emotional consequences of his/her decision.

  10. Role of the area postrema in radiation-induced taste aversion learning and emesis in cats

    International Nuclear Information System (INIS)

    Rabin, B.M.; Hunt, W.A.; Chedester, A.L.; Lee, J.

    1986-01-01

    The role of the area postrema in radiation-induced emesis and taste aversion learning and the relationship between these behaviors were studied in cats. The potential involvement of neural factors which might be independent of the area postrema was minimized by using low levels of ionizing radiation (100 rads at a dose rate of 40 rads/min) to elicit a taste aversion, and by using body-only exposures (4500 and 6000 rads at 450 rads/min) to produce emesis. Lesions of the area postrema disrupted both taste aversion learning and emesis following irradiation. These results, which indicate that the area postrema is involved in the mediation of both radiation-induced emesis and taste aversion learning in cats under these experimental conditions, are interpreted as being consistent with the hypotheses that similar mechanisms mediate both responses to exposure to ionizing radiation, and that the taste aversion learning paradigm can therefore serve as a model system for studying radiation-induced emesis

  11. State-dependent interaction in the antihistamine-induced disruption of a radiation-induced conditioned taste aversion

    International Nuclear Information System (INIS)

    Rabin, B.M.; Hunt, W.A.; Lee, J.

    1982-01-01

    Two experiments were run to evaluate the possibility that injection of antihistamine can produce a state-dependent acquisition of a radiation-induced conditioned taste aversion. In the first experiment, pretreating rats with the antihistamine chlorpheniramine maleate prior to their initial exposure to sucrose and to low-level irradiation on the conditioning day did not prevent the acquisition of a taste aversion to sucrose when the antihistamine was also administered prior to a subsequent preference test. In the second experiment, rats were both conditioned and tested for a radiation-induced aversion in a drug-free state. Under these condtions, the rats continued to show an aversion to sucrose despite pretreating them with chlorpheniramine prior to irradiation. Since rats conditioned under the antihistamine do not show the radiation-induced conditioned taste aversion when tested for sucrose preference in a nondrug state, it would seem that pretreating rats with an antihistamine prior to conditioning affects only the retrieval of the previously learned response and not its acquisition

  12. Medial amygdala lesions selectively block aversive Pavlovian-instrumental transfer in rats.

    Directory of Open Access Journals (Sweden)

    Margaret Grace McCue

    2014-09-01

    Full Text Available Pavlovian conditioned stimuli (CSs play an important role in the reinforcement and motivation of instrumental active avoidance (AA. Conditioned threats can also invigorate ongoing AA responding (aversive Pavlovian-instrumental transfer or PIT. The neural circuits mediating AA are poorly understood, although lesion studies suggest that lateral, basal and central amygdala nuclei, as well as infralimbic prefrontal cortex, make key, and sometimes opposing, contributions. We recently completed an extensive analysis of brain c-Fos expression in good vs. poor avoiders following an AA test (Martinez et al 2013, Learning and Memory. This analysis identified medial amygdala (MeA as a potentially important region for Pavlovian motivation of instrumental actions. MeA is known to mediate defensive responding to innate threats as well as social behaviors, but its role in mediating aversive Pavlovian-instrumental interactions is unknown. We evaluated the effect of MeA lesions on Pavlovian conditioning, Sidman two-way AA conditioning (shuttling and aversive PIT in rats. Mild footshocks served as the unconditioned stimulus in all conditioning phases. MeA lesions had no effect on AA but blocked the expression of aversive PIT and 22 kHz ultrasonic vocalizations in the AA context. Interestingly, MeA lesions failed to affect Pavlovian freezing to discrete threats but reduced freezing to contextual threats when assessed outside of the AA chamber. These findings differentiate MeA from lateral and central amygdala, as lesions of these nuclei disrupt Pavlovian freezing and aversive PIT, but have opposite effects on AA performance. Taken together, these results suggest that MeA plays a selective role in the motivation of instrumental avoidance by general or uncertain Pavlovian threats.

  13. Risk, ambiguity and sovereign rating

    OpenAIRE

    Di Caro, Paolo

    2014-01-01

    Decisions of investing in sovereign assets involve both risk and ambiguity. Ambiguity arises from unknown elements characterizing the value of a generic sovereign. In presence of ambiguity, ambiguity-averse investors are prone to pay for obtaining summary information such as ratings which reduces ambiguity. Ambiguity-neutral and ambiguity-averse investors, then, make decisions on the basis of different informative sources. By presenting a simple model of sovereign rating under ambiguity, thre...

  14. A psychological law of inertia and the illusion of loss aversion

    Directory of Open Access Journals (Sweden)

    David Gal

    2006-07-01

    Full Text Available The principle of loss aversion is thought to explain a wide range of anomalous phenomena involving tradeoffs between losses and gains. In this article, I show that the anomalies loss aversion was introduced to explain --- the risky bet premium, the endowment effect, and the status-quo bias --- are characterized not only by a loss/gain tradeoff, but by a tradeoff between the status-quo and change; and, that a propensity towards the status-quo in the latter tradeoff is sufficient to explain these phenomena. Moreover, I show that two basic psychological principles --- (1 that motives drive behavior; and (2 that preferences tend to be fuzzy and ill-defined --- imply the existence of a robust and fundamental propensity of this sort. Thus, a loss aversion principle is rendered superfluous to an account of the phenomena it was

  15. Neural markers of attention to aversive pictures predict response to cognitive behavioral therapy in anxiety and depression.

    Science.gov (United States)

    Stange, Jonathan P; MacNamara, Annmarie; Barnas, Olga; Kennedy, Amy E; Hajcak, Greg; Phan, K Luan; Klumpp, Heide

    2017-02-01

    Excessive attention toward aversive information may be a core mechanism underlying emotional disorders, but little is known about whether this is predictive of response to treatments. We evaluated whether enhanced attention toward aversive stimuli, as indexed by an event-related potential component, the late positive potential (LPP), would predict response to cognitive behavioral therapy (CBT) in patients with social anxiety disorder and/or major depressive disorder. Thirty-two patients receiving 12 weeks of CBT responded to briefly-presented pairs of aversive and neutral pictures that served as targets or distracters while electroencephaolography was recorded. Patients with larger pre-treatment LPPs to aversive relative to neutral distracters (when targets were aversive) were more likely to respond to CBT, and demonstrated larger reductions in symptoms of depression and anxiety following treatment. Increased attention toward irrelevant aversive stimuli may signal attenuated top-down control, so treatments like CBT that improve this control could be beneficial for these individuals. Copyright © 2016 Elsevier B.V. All rights reserved.

  16. Individual Differences in Loss Aversion: Conscientiousness Predicts How Life Satisfaction Responds to Losses Versus Gains in Income.

    Science.gov (United States)

    Boyce, Christopher J; Wood, Alex M; Ferguson, Eamonn

    2016-04-01

    Loss aversion is considered a general pervasive bias occurring regardless of the context or the person making the decision. We hypothesized that conscientiousness would predict an aversion to losses in the financial domain. We index loss aversion by the relative impact of income losses and gains on life satisfaction. In a representative German sample (N = 105,558; replicated in a British sample, N = 33,848), with conscientiousness measured at baseline, those high on conscientiousness have the strongest reactions to income losses, suggesting a pronounced loss aversion effect, whereas for those moderately unconscientious, there is no loss aversion effect. Our research (a) provides the first evidence of personality moderation of any loss aversion phenomena, (b) supports contextual perspectives that both personality and situational factors need to be examined in combination, (c) shows that the small but robust relationship between income and life satisfaction is driven primarily by a subset of people experiencing highly impactful losses. © 2016 by the Society for Personality and Social Psychology, Inc.

  17. Strain-dependent sex differences in the effects of alcohol on cocaine-induced taste aversions.

    Science.gov (United States)

    Jones, Jermaine D; Busse, Gregory D; Riley, Anthony L

    2006-04-01

    Research using the conditioned taste aversion procedure has reported that a cocaine/alcohol combination induces a significantly stronger taste aversion than either cocaine or alcohol alone. These findings suggest that the co-administration of alcohol intensifies the aversive effects of cocaine. Although the behavioral interaction of cocaine and alcohol is well established, little is known about how the effects of this drug combination might be modulated by a variety of subject variables. The current investigation addressed this by assessing if the ability of alcohol to potentiate cocaine-induced taste aversions is dependent upon the strain and/or sex of the subject. In this series of studies, male and female rats of Long-Evans (Experiment 1) and Sprague-Dawley (Experiment 2) descent were given limited access to a novel saccharin solution to drink and were then injected with either vehicle, cocaine (20 mg/kg), alcohol (0.56 g/kg) or the alcohol/cocaine combination. This procedure was repeated every fourth day for a total of four conditioning trials. All subjects were then compared on an Aversion Test that followed the fourth conditioning cycle. In three of the groups tested (male Long-Evans; male and female Sprague-Dawley), cocaine induced a significant taste aversion that was unaffected by the co-administration of alcohol. However, in female Long-Evans subjects, the addition of alcohol significantly strengthened the avoidance of the saccharin solution. Although the effects of alcohol on cocaine-induced taste aversions are dependent upon an interaction of sex and strain, the basis for this SexxStrain interaction is not known. That such an interaction is evident suggests that attention to such factors in assessing the effects of drug combinations is important to understanding the likelihood of the use and abuse of such drugs.

  18. Anxiety, attention, and decision making: The moderating role of heart rate variability.

    Science.gov (United States)

    Ramírez, Encarnación; Ortega, Ana Raquel; Reyes Del Paso, Gustavo A

    2015-12-01

    The current exploratory research examined whether high frequency heart rate variability (HF-HRV) modulates the association between anxiety and (1) executive attentional control during situations involving neutral stimuli, in which the distractor stimuli are in conflict with the target stimulus, and (2) risk aversion in decision making. Forty-five participants (21 with low and 24 with high trait-anxiety) performed a modified version of the Attention Network Test to measure attentional control, and the Balloon Analog Risk Task to measure risk aversion. HF-HRV was recorded during a rest period before completion of the tasks. Results showed that individuals with high anxiety and low HF-HRV have worse attentional control in the face of conflicting information as well as greater risk aversion, in comparison with individuals with both high anxiety and high HF-HRV or low anxiety (regardless of HF-HRV). HF-HRV was positively associated with attentional control and negatively associated with risk aversion. Furthermore, a strong negative association was observed between attentional control and risk aversion. These results suggest that HF-HRV modulates the influence of anxiety on both attentional control to neutral stimuli, and risk aversion in decision making. Greater HF-HRV appears to fulfill a protective role in highly anxious individuals. The associations observed also suggest that executive control of attention plays a relevant role in decision making. These results support the relevance of the autonomic nervous system in sustained cognition and are in accordance with theories in which vagal-mediated heart rate variability is taken as an indicator of prefrontal cortex inhibitory influences. Copyright © 2015 Elsevier B.V. All rights reserved.

  19. Radiation-induced taste aversion: effects of radiation exposure level and the exposure-taste interval

    International Nuclear Information System (INIS)

    Spector, A.C.; Smith, J.C.; Hollander, G.R.

    1986-01-01

    Radiation-induced taste aversion has been suggested to possibly play a role in the dietary difficulties observed in some radiotherapy patients. In rats, these aversions can still be formed even when the radiation exposure precedes the taste experience by several hours. This study was conducted to examine whether increasing the radiation exposure level could extend the range of the exposure-taste interval that would still support the formation of a taste aversion. Separate groups of rats received either a 100 or 300 R gamma-ray exposure followed 1, 3, 6, or 24 h later by a 10-min saccharin (0.1% w/v) presentation. A control group received a sham exposure followed 1 h later by a 10-min saccharin presentation. Twenty-four hours following the saccharin presentation all rats received a series of twelve 23-h two-bottle preference tests between saccharin and water. The results indicated that the duration of the exposure-taste interval plays an increasingly more important role in determining the initial extent of the aversion as the dose decreases. The course of recovery from taste aversion seems more affected by dose than by the temporal parameters of the conditioning trial

  20. Inequity aversion and the evolution of cooperation

    Science.gov (United States)

    Ahmed, Asrar; Karlapalem, Kamalakar

    2014-02-01

    Evolution of cooperation is a widely studied problem in biology, social science, economics, and artificial intelligence. Most of the existing approaches that explain cooperation rely on some notion of direct or indirect reciprocity. These reciprocity based models assume agents recognize their partner and know their previous interactions, which requires advanced cognitive abilities. In this paper we are interested in developing a model that produces cooperation without requiring any explicit memory of previous game plays. Our model is based on the notion of inequity aversion, a concept introduced within behavioral economics, whereby individuals care about payoff equality in outcomes. Here we explore the effect of using income inequality to guide partner selection and interaction. We study our model by considering both the well-mixed and the spatially structured population and present the conditions under which cooperation becomes dominant. Our results support the hypothesis that inequity aversion promotes cooperative relationship among nonkin.

  1. Risk Measurement of Equity Markets and Private Investor Behaviour

    Directory of Open Access Journals (Sweden)

    Stanislav Škapa

    2013-11-01

    Full Text Available Purpose of this article: The aim of this paper is to evaluate and determine risk profile of equities markets and conclude consequency for private investor portfolios. There is summarized broad issue of risk measuremen with a focuse on downside risk measurement principle and giving into context with expected utility theory and loss aversion theory. Methodology/methods: The suitable statistical methods (mainly robust statistical methods have been used for estimation of selected characteristics and ratios. There is used a computer intensive method (a bootstrap method for estimating risk characteristics for equity markets, indicators and ratios. Scientific aim: The main scientific aim is to use a complex of more sophisticated and theoretically advanced statistical techniques and apply them on on the finding of the expected utility theory and the loss aversion theory. Findings: A main finding should be reckon a using of results of loss aversion theory applied into empirical evidence of risk profile of equity markets which led to the finding that more reliable and more suitable evaluation of risk of equity markets is downside risk and Sortino ratio from the perpective of private investor. Conclusion: Using downside risk measurement is revealing as it lays bare the “true” risk of investing in stock markets mainly for risk averse private investors. A bootstrap method with down side risk metric can evaluate risk in more appropriate way, and it is also more suitable if statistical characteristics do not fulfil a normal distribution assumption (mostly because of fat tails or outliers. And lastly in general, investors in emerging market (e.g. Visegrad´s countries are rewarded with higher return, but if things go wrong, the damage can be severe and detrimental to performance.

  2. The monetary value of the man-mSv for Korean NPP radiation workers assessed by the radiation aversion factor

    International Nuclear Information System (INIS)

    Lee, B. I.; Suh, D. H.; Kim, S. I.; Jeong, M. S.; Lim, Y. K.

    2008-01-01

    The monetary value of the man-mSv for operators of Korean nuclear power plants (NPPs) was calculated using a radiation aversion factor based on a survey of NPP workers. Initially, the life expectancy in the population is 79.4 y, the average age of cancer occurrence is 60 y, the average annual wage for an electric worker is 56 000 $ y -1 and the nominal risk coefficient induced by radiation is 4.2 E-5 mSv were used to evaluate the basic monetary value (α base) resulting in 45.6 $ mSv -1 . To investigate the degree of radiation aversion, the subject of the investigation was selected as the working radiation workers in 10 NPPs in Korea (Kori 1-2, Yeonggwang 1-3, Ulchin 1-3 and Wolseong 1-2). In August 2010, with the cooperation of KHNP and partner companies, a total of 2500 survey questionnaires to 10 NPPs (or 250 surveys to each NPP) were distributed to currently employed radiation workers. From these, 2157 responses were obtained between August and October 2010. The assessed radiation aversion factor and the monetary value of the man-mSv from the calculated radiation aversion factor were 1.26 and ∼50 $ in the 0-1 mSv range, 1.38 and ∼200 $ in the 1-5 mSv range, 1.52 and ∼1000 $ in the 5-10 mSv range, 1.65 and ∼4000 $ in the 10-20 mSv range and 1.74 and ∼8500 $ >20 mSv. (authors)

  3. Risk and Soviet Security Decisions

    National Research Council Canada - National Science Library

    Hull, Andrew

    1990-01-01

    .... There are several exceptions to general Soviet risk aversion in using military power. But in each instance, the Soviet Union has fared rather badly when it chanced large risks in pursuit of correspondingly high potential gains...

  4. Aversive Life Events Enhance Human Freezing Responses

    NARCIS (Netherlands)

    Hagenaars, M.A.; Stins, J.F.; Roelofs, K.

    2012-01-01

    In the present study, we investigated the effect of prior aversive life events on freezing-like responses. Fifty healthy females were presented neutral, pleasant, and unpleasant images from the International Affective Picture System while standing on a stabilometric platform and wearing a polar band

  5. Aversive life events enhance human freezing responses

    NARCIS (Netherlands)

    Hagenaars, M.A.; Stins, J.F.; Roelofs, K.

    2012-01-01

    In the present study, we investigated the effect of prior aversive life events on freezing-like responses. Fifty healthy females were presented neutral, pleasant, and unpleasant images from the International Affective Picture System while standing on a stabilometric platform and wearing a polar band

  6. Attenuation of radiation- and drug-induced conditioned taste aversions following area postrema lesions in the rat

    International Nuclear Information System (INIS)

    Rabin, B.M.; Hunt, W.A.; Lee, J.

    1983-01-01

    The effects of lesions of the area postrema on the acquisition of radiation- and drug-induced (histamine and lithium chloride) conditioned taste aversions were investigated. The results indicated that area postrema lesions caused a significant attenuation of the aversion produced by pairing a novel sucrose solution with radiation (100 rad) or drug injection. Further, the area postrema lesions produced a similar level of attenuation of the taste aversion in all three treatment conditions. The results are discussed in terms of the implications of this finding for defining the mechanisms by which exposure to ionizing radiation can lead to the acquisition of a conditioned taste aversion

  7. Conditioned taste aversion: modulation by 5-HT receptor activity and corticosterone

    DEFF Research Database (Denmark)

    Boris, Gorzalka; Hanson, Laura; Harrington, J

    2003-01-01

    Two experiments were designed to elucidate the involvement of the hypothalamic-pituitary-adrenal axis and the 5-hydroxytryptamine (5-HT) system in the acquisition of lithium chloride-conditioned taste aversion. In Experiment 1, rats were administered either vehicle or 50 mg/kg nefazodone daily fo......, corticosterone-treated animals required more trials to reach extinction. These results suggest the involvement of both the 5-HT system and the hypothalamic-pituitary-adrenal axis in lithium chloride-conditioned taste aversion....

  8. Risk preferences under acute stress

    Czech Academy of Sciences Publication Activity Database

    Cahlíková, Jana; Cingl, L.

    2017-01-01

    Roč. 20, č. 1 (2017), s. 209-236 ISSN 1386-4157 Institutional support: RVO:67985998 Keywords : risk preferences * risk aversion * stress Subject RIV: AH - Economics OBOR OECD: Applied Economics, Econometrics Impact factor: 2.391, year: 2016

  9. The relationship between weight loss and time and risk preference parameters: a randomized controlled trial.

    Science.gov (United States)

    Takada, Akemi; Nakamura, Ryota; Furukawa, Masakazu; Takahashi, Yoshimitsu; Nishimura, Shuzo; Kosugi, Shinji

    2011-07-01

    This study aimed to assess the effectiveness of intervention (specifically, intervention by telephone and mails, known as 'tele-care') relative to self-help as a weight-loss method. The question of whether there is a correlation between changes in two preference parameters--time discounting (i.e. impatience) and risk aversion--and the level of commitment was examined. The study, spanning a period of 24 weeks in 2006-2007, comprised 118 participants, each of whom was randomly assigned to either the tele-care or the self-help group. A public-health nurse provided support through telephone and mail communications to the tele-care group, aiming to reduce their calorie intake and increase exercise via this intervention. There was a significant decrease in the body weight of the participants of the tele-care group from the baseline; however, there were no significant differences in the weight loss, median time discounting or risk aversion between the two groups. The subsequent analysis for weight loss with changes in time and risk parameters revealed a significant difference in the weight loss in the time-discounting-loss and risk-aversion-gain groups. From the results of the multiple regression analysis, the time discounting was noted to be associated with age, initial BMI and marital status among men, and risk aversion was associated with age and job status among women. There is a possibility that a decrease in time discounting and increase in risk aversion might correlate with the weight loss or effectiveness of commitment in this trial. This study suggests that time discounting and risk aversion may be useful in anti-obesity efforts, since they are accurate criteria of behavioural patterns associated with weight problems. © Cambridge University Press, 2011

  10. Attenuation and cross-attenuation in taste aversion learning in the rat: Studies with ionizing radiation, lithium chloride and ethanol

    International Nuclear Information System (INIS)

    Rabin, B.M.; Hunt, W.A.; Lee, J.

    1988-01-01

    The preexposure paradigm was utilized to evaluate the similarity of ionizing radiation, lithium chloride and ethanol as unconditioned stimuli for the acquisition of a conditioned taste aversion. Three unpaired preexposures to lithium chloride (3.0 mEq/kg, IP) blocked the acquisition of a taste aversion when a novel sucrose solution was paired with either the injection of the same dose of lithium chloride or exposure to ionizing radiation (100 rad). Similar pretreatment with radiation blocked the acquisition of a radiation-induced aversion, but had no effect on taste aversions produced by lithium chloride (3.0 or 1.5 mEq/kg). Preexposure to ethanol (4 g/kg, PO) disrupted the acquisition of an ethanol-induced taste aversion, but not radiation- or lithium chloride-induced aversions. In contrast, preexposure to either radiation or lithium chloride attenuated an ethanol-induced taste aversion in intact rats, but not in rats with lesions of the area postrema. The results are discussed in terms of relationships between these three unconditioned stimuli and in terms of implications of these results for understanding the nature of the proximal unconditioned stimulus in taste aversion learning

  11. AIRMEN AS BOLD RISK TAKERS REDEFINING RISK TO ACHIEVE OPERATIONAL AGILITY

    Science.gov (United States)

    2017-04-15

    scenarios27, and emotion tends to cloud perceptions of risk.28 Also, as the frequency of feedback on a given situation increases, aversion to loss...are not brand new or emerging technology such that there is still limited intelligence on them—do not significantly increase operational risk. Those

  12. Aversion learning can reduce meal size without taste avoidance in rats.

    Science.gov (United States)

    Tracy, Andrea L; Schurdak, Jennifer D; Chambers, James B; Benoit, Stephen C

    2016-03-01

    Nausea and aversive food responses are commonly reported following bariatric surgery, along with post-surgical reduction in meal size. This study investigates whether a meal size limit can be conditioned by associating large meals with aversive outcomes. In rats, the intake of meals exceeding a pre-defined size threshold was paired with lithium chloride-induced gastric illness, and the effects on self-determined food intakes and body weight were measured. Rats given LiCl contingent on the intake of a large meal learned to reliably reduce intake below this meal size threshold, while post-meal saline or LiCl before meals did not change meal size. It was further demonstrated that this is not a conditioned taste aversion and that this effect transferred to foods not explicitly trained. Finally, when rats received LiCl following all large meals, the number of small meals increased, but total food intake and body weight decreased. While further work is needed, this is the first demonstration that meal size may be conditioned, using an aversion procedure, to remain under a target threshold and that this effect is distinct from taste avoidance. Corresponding reduction in food intake and body weight suggests that this phenomenon may have implications for developing weight loss strategies and understanding the efficacy of bariatric surgery. © 2016 The Obesity Society.

  13. How politicians make decisions under risk: a political choice experiment

    OpenAIRE

    Enrique Fatás; Tibor Neugebauer; Pilar Tamborero

    2004-01-01

    We report on an experimental study with real-world politicians. These political experts face political choice problems under risk and probability. Thus, we test the frequently observed violations of rational choice theory -the reference point effect, loss aversion, framing effects, and the common ratio effect- with experts from the field. Their choices violate expected utility theory. Nevertheless, they appear to be more rational and less risk averse (loving) in the domain of gains (losses) t...

  14. Behavioral architecture of opioid reward and aversion in C57BL/6 substrains

    Directory of Open Access Journals (Sweden)

    Stacey L Kirkpatrick

    2015-01-01

    Full Text Available Drug liking versus drug disliking is a subjective motivational measure in humans that assesses the addiction liability of drugs. Variation in this trait is hypothesized to influence vulnerability versus resilience toward substance abuse disorders and likely contains a genetic component. In rodents and humans, conditioned place preference (CPP / aversion (CPA is a Pavlovian conditioning paradigm whereby a learned preference for the drug-paired environment is used to infer drug liking whereas a learned avoidance or aversion is used to infer drug disliking. C57BL/6 inbred mouse substrains are nearly genetically identical, yet demonstrate robust differences in addiction-relevant behaviors, including locomotor sensitization to cocaine and consumption of ethanol. Here, we tested the hypothesis that B6 substrains would demonstrate differences in the rewarding properties of the mu opioid receptor agonist oxycodone (5 mg/kg, i.p. and the aversive properties of the opioid receptor antagonist naloxone (4 mg/kg, i.p.. Both substrains showed similar degrees of oxycodone-induced CPP; however, there was a three-fold enhancement of naloxone-induced CPA in agonist-naïve C57BL/6J relative to C57Bl/6NJ mice. Exploratory factor analysis of CPP and CPA identified unique factors that explain variance in behavioral expression of reward versus aversion. Conditioned Opioid-Like Behavior was a reward-based factor whereby drug-free locomotor variables resembling opioid treatment co-varied with the degree of CPP. Avoidance and Freezing was an aversion-based factor, whereby the increase in the number of freezing bouts co-varied with the degree of aversion. These results provide new insight into the behavioral architecture of the motivational properties of opioids. Future studies will use quantitative trait locus mapping in B6 substrains to identify novel genetic factors that contribute to the marked strain difference in NAL-CPA.

  15. The estimation of risk-premium implicit in oil prices

    International Nuclear Information System (INIS)

    Luis, J.B.

    2001-01-01

    The futures price can be seen as the sum of the expected value of the underlying asset price and a risk-premium. In order to disentangle these two components of the futures price, one can try to model the relationship between spot and futures prices, in order to obtain a closed expression for the risk-premium, or to use information from spot and option prices to estimate risk-aversion functions. Given the high volatility of the ratios between futures and spot prices, we opted for the latter, estimating risk-neutral and subjective probability density functions, respectively, from observed option and spot prices. looking at the prices of Brent and West Texas Intermediate light/sweet crude oil options, the obtained evidence suggests that risk-aversion is typically very low for levels near the futures prices. However, due to price volatility and, consequently, to the tails of distribution, the risk-aversion functions are badly behaved in extreme prices and futures prices do not anticipate sharp movements in oil spot prices. Therefore, futures oil prices seem to be useful in forecasting spot prices only when moderate price changes occur. (author)

  16. Nicotine aversion: Neurobiological mechanisms and relevance to tobacco dependence vulnerability

    Science.gov (United States)

    Fowler, Christie D.; Kenny, Paul J.

    2013-01-01

    Nicotine stimulates brain reward circuitries, most prominently the mesocorticolimbic dopamine system, and this action is considered critical in establishing and maintaining the tobacco smoking habit. Compounds that attenuate nicotine reward are considered promising therapeutic candidates for tobacco dependence, but many of these agents have other actions that limit their potential utility. Nicotine is also highly noxious, particularly at higher doses, and aversive reactions to nicotine after initial exposure can decrease the likelihood of developing a tobacco habit in many first time smokers. Nevertheless, relatively little is known about the mechanisms of nicotine aversion. The purpose of this review is to present recent new insights into the neurobiological mechanisms that regulate avoidance of nicotine. First, the role of the mesocorticolimbic system, so often associated with nicotine reward, in regulating nicotine aversion is highlighted. Second, genetic variation that modifies noxious responses to nicotine and thereby influences vulnerability to tobacco dependence, in particular variation in the CHRNA5-CHRNA3-CHRNB4 nicotinic acetylcholine receptor (nAChR) subunit gene cluster, will be discussed. Third, the role of the habenular complex in nicotine aversion, primarily medial habenular projections to the interpeduncular nucleus (IPN) but also lateral habenular projections to rostromedial tegmental nucleus (RMTg) and ventral tegmental area (VTA) are reviewed. Forth, brain circuits that are enriched in nAChRs, but whose role in nicotine avoidance has not yet been assessed, will be proposed. Finally, the feasibility of developing novel therapeutic agents for tobacco dependence that act not by blocking nicotine reward but by enhancing nicotine avoidance will be considered. PMID:24055497

  17. Perception of Product Risks

    NARCIS (Netherlands)

    Fischer, A.R.H.

    2017-01-01

    This chapter provides several explanations for consumer risk perception. For frequently repeated behavior that is seemingly under their own control, consumers tend to be overly optimistic. This occurs in spite of the general tendency of consumers to be risk averse. Specific dimensions of different

  18. Investigating the Predictive Value of Functional MRI to Appetitive and Aversive Stimuli: A Pattern Classification Approach.

    Directory of Open Access Journals (Sweden)

    Ciara McCabe

    Full Text Available Dysfunctional neural responses to appetitive and aversive stimuli have been investigated as possible biomarkers for psychiatric disorders. However it is not clear to what degree these are separate processes across the brain or in fact overlapping systems. To help clarify this issue we used Gaussian process classifier (GPC analysis to examine appetitive and aversive processing in the brain.25 healthy controls underwent functional MRI whilst seeing pictures and receiving tastes of pleasant and unpleasant food. We applied GPCs to discriminate between the appetitive and aversive sights and tastes using functional activity patterns.The diagnostic accuracy of the GPC for the accuracy to discriminate appetitive taste from neutral condition was 86.5% (specificity = 81%, sensitivity = 92%, p = 0.001. If a participant experienced neutral taste stimuli the probability of correct classification was 92. The accuracy to discriminate aversive from neutral taste stimuli was 82.5% (specificity = 73%, sensitivity = 92%, p = 0.001 and appetitive from aversive taste stimuli was 73% (specificity = 77%, sensitivity = 69%, p = 0.001. In the sight modality, the accuracy to discriminate appetitive from neutral condition was 88.5% (specificity = 85%, sensitivity = 92%, p = 0.001, to discriminate aversive from neutral sight stimuli was 92% (specificity = 92%, sensitivity = 92%, p = 0.001, and to discriminate aversive from appetitive sight stimuli was 63.5% (specificity = 73%, sensitivity = 54%, p = 0.009.Our results demonstrate the predictive value of neurofunctional data in discriminating emotional and neutral networks of activity in the healthy human brain. It would be of interest to use pattern recognition techniques and fMRI to examine network dysfunction in the processing of appetitive, aversive and neutral stimuli in psychiatric disorders. Especially where problems with reward and punishment processing have been implicated in the pathophysiology of the disorder.

  19. How not to extend models of inequality aversion

    Czech Academy of Sciences Publication Activity Database

    Engelmann, Dirk

    2012-01-01

    Roč. 81, č. 2 (2012), s. 599-605 ISSN 0167-2681 Institutional research plan: CEZ:AV0Z70850503 Keywords : inequality aversion * efficiency * social preferences Subject RIV: AH - Economics Impact factor: 1.065, year: 2012

  20. Responsibility, guilt, and decision under risk.

    Science.gov (United States)

    Mancini, Francesco; Gangemi, Amelia

    2003-12-01

    We hypothesize that individuals' choices (risk-seeking/risk-aversion) depend on moral values and, in particular, on how subjects evaluate themselves as guilty or as victims of a wrong rather than on the descriptions of the outcomes as given in the options and evaluated accordingly as gains or losses (framing effect). People who evaluate themselves as victims are expected to show a risk-seeking preference (context of innocence). People who evaluate themselves as guilty are expected to show a risk-averse preference (context of guilt). Responses of 232 participants to a decision problem were compared in four different conditions involving two-story formats (innocence/guilt) and two-question-options formats (gain/loss). Regardless of the format of the question options, the story format appears to be an important determinant of individuals' preferences.