American Economic Review Vol. 105 No. 5 2015
Loss Aversion in Post-Sale Purchases of Consumer Products and their Substitutes
Abstract
This paper considers the measurement of consumer loss aversion in product markets. We introduce a test based on a “substitution effect,” focusing on how the end of a sale affects sales not of the good itself, but a substitute good. Such an effect cannot be easily confounded with consumer stockpiling. Using a unique dataset from an online hardware retailer, we find evidence consistent with consumer loss aversion. Moreover, we find that less experienced consumers suffer a more prominent loss aversion bias compared to more experienced consumers.
- DOI
- 10.1257/aer.p20151037
- Volume
- 105
- Issue
- 5
- Pages
- 376-380
- Language
- en
- Sources
- bibtex:phds-export.bib crossref openalex