Impact of Consumer Loss Aversion on Operations in the Context of Remanufacturing

Complexity ◽

10.1155/2020/3065819 ◽

2020 ◽

Vol 2020 ◽

pp. 1-10

Author(s):

Bi-feng Liao ◽

Bing-zhang Wang

Keyword(s):

Numerical Computation ◽

Loss Aversion ◽

High Probability ◽

Game Model ◽

Psychological Characteristic ◽

Substitutable Products ◽

Theoretical Analyses

Loss aversion is an important psychological characteristic that has become well supported in finance and marketing. This paper introduces consumer loss aversion into the game model with two substitutable products in a remanufacturing system. The loss-averse consumers gain utility from comparing the price and value dimensions with the superior product. Our model highlights alternative products competition, product selections, and consumption psychology in a remanufacturing environment. The results show that consumer loss aversion has important implications on key decisions in the remanufacturing system. When the manufacturer faces loss-averse consumers, there is a tendency to charge higher prices for two types of products. At the same time, the sales prices increase with the degree of loss aversion. Further analysis reveals that if the manufacturer manipulates consumers with a high probability of purchase, the feature of loss aversion usually benefits him. Our theoretical analyses are proven by numerical computation and some useful conclusions are summarized in this paper.

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Evolutionary Game Analysis of Firms’ Technological Strategic Choices: A Perspective of the Behavioral Biases

Complexity ◽

10.1155/2021/4294125 ◽

2021 ◽

Vol 2021 ◽

pp. 1-17

Author(s):

Yingqing Zhang ◽

Ruguo Fan ◽

Ming Luo ◽

Mingman Chen ◽

Jiaqin Sun

Keyword(s):

Decision Making ◽

Intellectual Property ◽

Loss Aversion ◽

Evolutionary Game ◽

Spillover Effect ◽

Intellectual Property Protection ◽

Game Model ◽

Probability Weighting ◽

Strategic Choices ◽

Behavioral Biases

To reveal the mechanisms of firms’ technological strategic choices between innovation and imitation, an evolutionary game model is proposed from the perspective of the behavioral biases. First, behavioral biases such as reference point dependence, loss aversion, and probability weighting can be defined and modeled based on the prospect theory. Second, according to the firm theory, a Cournot or Stackelberg game modeled with a technology spillover effect and intellectual property protection is applied to portray the interaction between firms. Third, an improved evolutionary game model is provided by incorporating behavioral biases into the framework of the decision-making process. Finally, the simulation analysis of some important factors, such as intellectual property protection, patent fees, innovation risks, decision-making attitudes, and consumers’ price preference on firms’ technological strategic choices, is presented. The corresponding results show that (1) innovation risk is an important factor affecting the technological strategic choices of firms, (2) increasing the intellectual property protection and the patent fee for technology transfer can effectively control the spillover effect of technology, (3) there is a partial U-shaped relationship between the consumers’ price preference and innovation, and (4) the behavioral biases such as reference point dependence, loss aversion, and probability weighting will change the perception of payoff and risk and will eventually induce firms to adopt the innovation strategy.

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A differential game model of a market of substitutable products

European Journal of Operational Research ◽

10.1016/0377-2217(95)00083-6 ◽

1996 ◽

Vol 90 (3) ◽

pp. 599-608 ◽

Cited By ~ 3

Author(s):

David W.K. Yeung

Keyword(s):

Differential Game ◽

Game Model ◽

Substitutable Products

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Research on Bias of Owner's Decision-Making in Risk-Sharing in Construction Project - A Perspective of Bounded Rationality

Applied Mechanics and Materials ◽

10.4028/www.scientific.net/amm.357-360.2164 ◽

2013 ◽

Vol 357-360 ◽

pp. 2164-2170

Author(s):

Yi Lin Yin ◽

Zhi Chao Xu ◽

Qing Song Zou

Keyword(s):

Decision Making ◽

Risk Management ◽

Quantitative Analysis ◽

Bounded Rationality ◽

Loss Aversion ◽

Risk Sharing ◽

Dominant Strategy ◽

Game Model ◽

Ex Post ◽

The Cost

Bounded rationality has an important impact on owners decision-making of risk-sharing in the project. Based on the hypothesis of bounded rationality, the paper established a risk-sharing game model concerning owners reference dependency and loss aversion, as well as conducted the quantitative analysis. The finding shows that comparing with the hypothesis of rationality, if taking the ex-post transaction cost as reference, when owner considers that the cost of risk management is smaller, the bounded rationality would make the owner prefer the proper risk-sharing; when owner considers that the cost of risk management is larger, the owner would prefer the improper risk-sharing; when the objective cost of risk management is larger than the ex-post transaction, the improper risk-sharing would be owners dominant strategy, and bounded rationality has no impact on owners decision-making of risk-sharing.

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Resolution in the scanning tunneling microscope

Proceedings, annual meeting, Electron Microscopy Society of America ◽

10.1017/s042482010008674x ◽

1991 ◽

Vol 49 ◽

pp. 488-489

Author(s):

R. J. Wilson ◽

D. D. Chambliss ◽

S. Chiang ◽

V. M. Hallmark

Keyword(s):

Scanning Tunneling Microscope ◽

Fundamental Principle ◽

Atomic Scale ◽

Lateral Resolution ◽

Scanning Tunneling ◽

Electronic Noise ◽

Vertical Resolution ◽

Tunneling Microscopy ◽

Spatial Profile ◽

Theoretical Analyses

Scanning tunneling microscopy (STM) has been used for many atomic scale observations of metal and semiconductor surfaces. The fundamental principle of the microscope involves the tunneling of evanescent electrons through a 10Å gap between a sharp tip and a reasonably conductive sample at energies in the eV range. Lateral and vertical resolution are used to define the minimum detectable width and height of observed features. Theoretical analyses first discussed lateral resolution in idealized cases, and recent work includes more general considerations. In all cases it is concluded that lateral resolution in STM depends upon the spatial profile of electronic states of both the sample and tip at energies near the Fermi level. Vertical resolution is typically limited by mechanical and electronic noise.

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Quick Consult: Quick Consult: Acromioplasty

Guides Newsletter ◽

10.1001/amaguidesnewsletters.2002.mayjun03 ◽

2002 ◽

Vol 7 (3) ◽

pp. 4-5

Keyword(s):

Glasgow Coma Scale ◽

Outcome Assessment ◽

High Probability ◽

Vegetative State ◽

Behavioral Impairment ◽

Whole Person ◽

Ordinal Scales ◽

Probability Of Death ◽

The Individual ◽

Assessment Scales

Abstract Different jurisdictions use the AMA Guides to the Evaluation of Permanent Impairment (AMA Guides) for different purposes, and this article reviews a specific jurisdictional definition in the Province of Ontario of catastrophic impairment that incorporates the AMA Guides. In Ontario, a whole person impairment (WPI) exceeding 54% or a mental or behavioral impairment of Class 4 or 5 qualifies the individual for catastrophic benefits, and individuals who do not meet the test receive a lesser benefit. By inference, this establishes a parity threshold among dissimilar injuries and dissimilar outcome assessment scales for benefits. In Ontario, the Glasgow Coma Scale (GCS) identifies patients who have a high probability of death or of severely disabled survival. The GCS recognizes gradations of vegetative state and disability, but translating the gradations for rating individual impairment on ordinal scales into a method of assessing percentage impairments cannot be done reliably, as explained in the AMA Guides, Fifth Edition. The AMA Guides also notes that mental and behavioral impairment in Class 4 (marked impairment) or 5 (extreme impairment) indicates “catastrophic impairment” by significantly impeding useful functioning (Class 4) or significantly impeding useful functioning and implying complete dependency on another person for care (Class 5). Translating the AMA Guides guidelines into ordinal scales cannot be done reliably.

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The Effect of Outcome Probability on Generalization in Predictive Learning

Experimental Psychology (formerly Zeitschrift für Experimentelle Psychologie) ◽

10.1027/1618-3169/a000429 ◽

2019 ◽

Vol 66 (1) ◽

pp. 23-39 ◽

Cited By ~ 1

Author(s):

Hadar Ram ◽

Dieter Struyf ◽

Bram Vervliet ◽

Gal Menahem ◽

Nira Liberman

Keyword(s):

High Probability ◽

Lower Probability ◽

Perceptual Similarity ◽

Learning Paradigm ◽

Predictive Learning ◽

Lightning Bolt ◽

Outcome Probability

Abstract. People apply what they learn from experience not only to the experienced stimuli, but also to novel stimuli. But what determines how widely people generalize what they have learned? Using a predictive learning paradigm, we examined the hypothesis that a low (vs. high) probability of an outcome following a predicting stimulus would widen generalization. In three experiments, participants learned which stimulus predicted an outcome (S+) and which stimulus did not (S−) and then indicated how much they expected the outcome after each of eight novel stimuli ranging in perceptual similarity to S+ and S−. The stimuli were rings of different sizes and the outcome was a picture of a lightning bolt. As hypothesized, a lower probability of the outcome widened generalization. That is, novel stimuli that were similar to S+ (but not to S−) produced expectations for the outcome that were as high as those associated with S+.

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