Prof. Peter Jarnebrant, PhD
Professor - aktiv
Tätigkeit an Business Schools
Jarnebrant, P., Toubia, O., and Johnson, E. J. (Forthcoming). The Silver Lining Effect: Formal Analysis and Experiment. In Management Science.
The silver lining effect predicts that segregating a small gain from a larger loss results in greater psychological value than does integrating them into a smaller loss. Using a generic prospect theory value function, we formalize this effect and derive conditions under which it should occur. We show analytically that there exists a threshold such that segregation is optimal for gains smaller than this Threshold. The threshold is increasing in the size of the loss and decreasing in the degree of loss aversion of the decision maker. Our formal analysis results in a set of hypotheses suggesting that the silver lining effect is more likely to occur when: (i) the gain is smaller (for a given loss), (ii) the loss is larger (for a given gain), (iii) the decision maker is less loss averse. We test and confirm these predictions in a study of preferences for gambles, which we analyze in a hierarchical Bayesian framework.
Work in Progress
Jarnebrant, P., and Johnson, E. Loss Aversion and Visual Attention in Decision Making for Gambles (two studies run).
Jarnebrant, P., and Johnson, E. Why Remembering Matters: The Effect of Retrieval Induced Forgetting (rif) on the Valuation of Consumer Goods (two studies run).
Elicitation of Prospect Theory Parameters with Bayesian Estimation (some data collected, modeling/estimation in progress).
Savoring: Anticipatory Utility and Psychological Distance (pilot study run).