• Korean Management Science Review
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• v.32 no.3
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• pp.55-70
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• 2015

The main objective of this study is to investigate the moderating roles of the competitor's pricing strategy and the degree of consumer's risk-aversion on perceived risk and perceived benefit in responding to price increases and package downsizing. Based on Prospect Theory, several prior researches find that consumers perceive increased price as more loss than package downsizing and perceive package downsizing as more benefit than increased price. We extend these behavioral economics approach using the reference effect of competitor's pricing strategy. We focus on consumer heterogeneity on risk-aversion, measure the degree of consumer's risk-aversion, and divide the consumers into two groups of high levels of risk-aversion vs. low levels of risk-aversion. We find that the firm's pricing strategies of both price increases and package downsizing do not significantly influence the perceived benefit for relatively low risk-aversion consumers. We find that when the firm reduce the package size, relatively high risk-aversion consumers perceived more benefit and had higher purchase intention compared to price increases. We also find that the competitor's pricing strategies do not significantly influence the consumer's response for relatively low risk-aversion consumers. For relatively high risk-aversion consumers, they perceived more loss when the firm has different pricing strategy from the competitor's.

• Journal of Information Technology Applications and Management
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• v.25 no.1
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• pp.67-85
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• 2018

We propose a noise reduced risk aversion index for measuring risk aversion through a laboratory experiment to overcome disadvantages of the multiple pricing list format developed by Holt and Laury (2002). We use randomized multiple list choices with coarser classification and reward weighting, supplement the rank of risk aversion with extra individual characteristics of risk attitude, and construct an index of risk aversion by standardizing the risk aversion ranking with quantile normalization. Our method reduces multiple switching problems that noisy decision makers mistakenly commit in experimental approaches, so that it is free of the framing effect which severely occurred in the HL. Furthermore, the index doesn't utilize any specific utility function or probability weighting, which allows researcher to hold the independence axiom. Since our noise reduced index of risk aversion has many good traits, it is widely used and applied to reveal fundamental characteristics of risk-related behaviors in economics and finance regardless of experimental environment.

• Journal of Information Technology Applications and Management
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• v.22 no.2
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• pp.113-122
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• 2015

Collective intelligence can be an influential factor of decision-making based on collaboration and information exchange between individuals. Our study explores whether collective intelligence can mitigate the loss aversion effect, bias and error in human judgment, and collective intelligence in online communities can reduce the loss aversion effect. Our community settings display both individual-level and group-level loss aversion effect, investigate effective collective intelligence characteristics like investment commitment, participant experience. Using a multi-method approach our research comprises a web-based experiment with 100 participants investing 3 situations from a real-world community, data from a survey measuring loss aversion behavior of participants. The results suggest the loss aversion effect mitigates under the online-circumstance. Overall, our results suggest that, while collective intelligence mitigates the loss aversion effect, participants do not transfer these results to other settings.

• Journal of the Korean Society of Food Culture
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• v.22 no.1
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• pp.70-76
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• 2007

The purpose of this study was to measure the effects of food neophobia, nausea, and learned food aversion on food rejection and appetite. A total of 250 questionnaires were completed. Path analytic model was used to measure the relationships between variables. Results of the study demonstrated that the path analysis result for the data also indicated excellent model fit. The effects of food neophobia on nausea and food rejection were statistically significant. The effect of food neophobia on learned food aversion and appetite was not statistically significant. As expected, nausea had a significant effects on learned food aversion and appetite. Moreover, nausea played a perfect mediating role in the relationship between food neophobia and appetite. Nausea played a perfect mediating role in the relationship between food neophobia and learned food aversion. Learned food aversion played a partial mediating role in the relationship between nausea and appetite. Learned food aversion did not play a mediating role in the relationship between food neophobia and appetite. In conclusion, based on path analyses, a model was proposed of interrelations between variables. It should be noted that the original model was modified and should, preferably, be validated in future research.

• Knowledge Management Research
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• v.18 no.1
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• pp.49-65
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• 2017

Financial products entail either gains or losses, and customers' psychological reaction to these gains and losses affect the selection of the financial products. This study explains the financial customers' behavior by introducing consumers' psychological variables such as loss aversion and construal levels. According to the construal level theory, people use more abstract and higher levels of construal to represent objects that are more distant on psychological distance. Based on extant research about loss aversion and construal levels, this study proposes two hypotheses and test the hypotheses. The experimental study examines how loss aversion affects the choice between deposit products and fund products in short-term and long-term investment situations. In the long-term condition the respondents prefer fund products to deposit products, whereas in the short-term condition the respondents have showed the opposite result. Also, the effects of loss aversion on preferences for financial products have interacted with the time horizon of investments. Implications and limitations are discussed to establish more effective marketing strategies based on the results of this study.

• Korean Journal of Human Ecology
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• v.16 no.1
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• pp.183-191
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• 2007

The purpose of this study was to measure the effect of nausea and learned food aversion on relationships linking food neophobia to appetite and food rejection. A total of 250 questionnaires were completed. Path analytic model was used measure the effect of mediator. Results of the study demonstrated that the path analytic result for the data also indicated excellent model fit. The influences of food neophobia on nausea and food rejection were statistically significant. The influences of nausea on learned food aversion and appetite were statistically significant. The influences of food neophobia on learned food aversion and appetite were not statistically significant. The influence of nausea on food rejection was not statistically significant. Moreover, nausea and aversion played a perfectly mediating roles in the relationship between food neophobia and appetite. Aversion also played no mediating role in the relationship between food neophobia and food rejection.

• BMB Reports
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• v.50 no.1
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• pp.31-36
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• 2017

High-dose caffeine uptake is a developmental stressor and causes food-avoidance behavior (aversion phenotype) in C. elegans, but its mode of action is largely unknown. In this study, we investigated the molecular basis of the caffeine-induced aversion behavior in C. elegans. We found that aversion phenotype induced by 30 mM caffeine was mediated by JNK/MAPK pathway, serotonergic and dopaminergic neuroendocrine signals. In this process, the dopaminergic signaling appears to be the major pathway because the reduced aversion behavior in cat-2 mutants and mutants of JNK/MAPK pathway genes was significantly recovered by pretreatment with dopamine. RNAi depletion of hsp-16.2, a cytosolic chaperone, and cyp-35A family reduced the aversion phenotype, which was further reduced in cat-2 mutants, suggesting that dopaminergic signal is indeed dominantly required for the caffeine-induced food aversion. Our findings suggest that aversion behavior is a defense mechanism for worms to survive under the high-dose caffeine conditions.

• The Journal of Economics, Marketing and Management
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• v.12 no.2
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• pp.1-10
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• 2024

Purpose: This study conducted an empirical study to estimate the loss aversion rate of individual investors in the Seoul condominium market. Research design, data and methodology: A survey was conducted with Seoul residents ranging from 30's to 60's with various backgrounds. Descriptive statistical analysis and a paired sample t-test were conducted using SPSS 27.0 statistical package. Results: The results of the t-test showed that Seoul residents are indeed more sensitive to loss than gains, as pointed out in various researches related to behavioral economics. Also, the loss aversion rate associated with KRW 50 million risk was found to be 2.14. Finally, the same question was asked with KRW 100 million risk, doubled associated risk of previous question, using the same scenario, and it's been verified that the loss aversion rate increases as the associated risk or stake increases. The loss aversion rate with double risk is 2.26 which is about 5% higher than the one with KRW 50 million risk. Conclusions: This study can help many groups of people in society who need to establish rewards and punishment policies within any organization. In particular, incorporating human cognitive biases, such as loss aversion can help the South Korean government shape more effective reward and punishment policies when building rewards and punishments using taxes.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.16 no.2
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• pp.1036-1044
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• 2015

This paper estimates the relative risk aversion coefficients of apple farmers. Two hypothetical situations are designed and two-stage questionnaires are conducted for each situation. A utility function that has constant relative risk aversion was used, and it was assumed that the relative risk aversion coefficients follow a log-normal distribution. To reduce the hypothetical bias, the data was collected from repetitive questions. As a result, the mean and standard deviation of the relative risk aversion coefficients of apple farmers was 10.915 and 7.516, respectively. The relative risk aversion coefficients conditional on a survey response in each category were also measured. These findings can be used as parameters to analyze the effects of risk management tools.

• Management Science and Financial Engineering
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• v.17 no.1
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• pp.1-18
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• 2011

The present study provides a theoretical investigation on pioneering advantage based on reference dependence and loss aversion effect under prospect theory (Kahneman and Tversky, 1979). Behavioral explanations for pioneering advantage are provided from two different perspectives: one based on the prototypicality and the other on the utility uncertainty of the option. A pioneer brand creates the product category and makes a strong impression in customers' mind, and thus becomes the most representative or prototypical option of the category. In addition, the pioneer brand becomes the first option to be experienced by the majority of consumers in the product category, thus has the lowest level of utility uncertainty compared with the late movers. This study integrates the previous accounts for pioneering advantage by showing that consumers have higher preferences for the most prototypical and the least uncertain option based on loss aversion and reference dependence effect. This study suggests that firms should carefully analyze the consumers' loss aversion and perceived uncertainty and prototypicality of their products in order to develop effective market entry strategies.