Loss Aversion Parameter Measurement Based On Experiment Method And Empirical Research

Growing evidence shows that the loss aversion,a phenomenon formalized in prospect theory,which can explain a variety of field and experimental data.However,hindered by the absence of a general preference-based method to elicit the utility for gains and losses simultaneously.Most of the studies on loss aversion generally use Kahneman and Tversky to propose the curvature parameters and loss aversion coefficients in the prospect theory.We use non-parametric hypothesis to measure the individual utility,probability weight and loss aversion parameter.A parameter-free measurement provides three important advantages over parameter measurement.First of all,the measurement will notconfuse the shape of utility orprobability weight because of the assumption.Second,providing a psychological processto understand measurement,as there is a direct link between a selection and utility program.Third,the direct connection between the selection and utility program can solve the contradiction of the utility,which is important for the decision-making.It is directly related to the observed contradiction and the specific choice,which will bring new insights into the preference of the decision maker.There is no direct link between choice and utility in the parameter hypothesis.In order to carry out the parameter-free measurement,the paper uses an effective way to elicit midpoint of utility,which is very important for the study of the effectiveness of the utility.One of the key steps in this paper is:in the case of no making any assumptions of probability weight function,eliciting probability weight equal to 0.5.And using the bisection method to measure the utility,and establishing the utility function of individual subjects.According to several definitions of loss aversion utility,calculate the loss aversion in the whole level and individual level.We can prove ressonable form of utility function,and the utility function is concave for gains and isconvex function for losses,and get gainsparameter?lossesparameter and loss aversion coefficient.We find that the degree of loss aversion varies with the different definitions and the loss aversion behavior of women is more obvious.The reflection is not good at the individual level of loss aversion.