StudentShare solutions
Triangle menu

Background to the Study - Research Paper Example

Not dowloaded yet

Extract of sample
Background to the Study

In a way, it is a matter of risk and all the imperative factors that define human conduct with relation to risk and loss. Current Controversy The core of the argument in this case is the fact that losses have a relatively greater impact on choices than gains. While the proponents of the ideal behind los aversion and endowment effect seem to justify its applicability, much antipathy is still realized in this discourse. They question the real fundamentals behind these critical issues. Research question In this regard, the research seeks to answer the following question: “Does loss aversion have any significant uniform effect on the economic character of people.” Literature Review The concept of loss aversion has been a subject of much research and continuous discourse regarding its nature and the effect it has on the character of people. Losses are painful to humans than gains are pleasurable. Inasmuch as loss aversion might appear as a basic characterization across the human conduct, it helps to regard the whole aspects as a personality trait given its subjectivity and relativity. In risk analysis, it is realized that some individuals are more risk averse than others. In this case, risk aversion appears as a personality trait embedded in the character formation of an individual. In the same way, it is realized that loss version even varies within an individual on the basis of particular attributes. For instance somebody might be loss averse for fuel consumption of their car but not for food. This translates into different behaviors in different situations within an individual realm. In its most fundamental connotation, loss aversion is a function of the process of judgment. In this respect, loss aversion is not a mere attribute nor a parameter of choice but an outcome of value judgments (Novemsky & Kahneman 139). Therefore in decision making involving buying or selling, the basic point of reference is whether the trade should be conducted or not. The endowment effect better justifies the concept of loss aversion. The endowment effect affirms that people exhibit much regard for a particular good they own than on an identical commodity they do not own. In this respect therefore, the satisfaction lost when the owned commodity is lost is much higher than the satisfaction gained when the identical commodity is gained. Several studies in the recent past have questioned the very existence of loss aversion as a psychological character in the conduct of man. In examining the effect losses have on the process of decision making under situations of risk and uncertainty, loss aversion was never detected. Several lines of though emerge from this realization. On the one hand, it is seen that loss aversion is never present in limited payoff magnitudes. On the other hand, it is felt that the previously held generality on the concept of loss aversion was a much magnified affair that never exists as supposed. In the same regard, the loss aversion phenomenon does not exist and the whole situation can simply be explained by inertia. There is substantial evidence that people can experience loss aversion even for commodities they never owned. This occurs in case the commodities were part of the choice options that were under judgment in the process of making decisions. It is realized that endowment effect is normally reduced or increased as a function of the similarity of the endowed and un-endowed effect. In the same way, loss ...Show more

Summary

Date Introduction Background to the Study Loss aversion is a very fundamental aspect in the behavioral context of human character. The fact that losses have a much bigger impact on the conduct of man than gains helps to underscore very innate issues regarding human motivation and economic behaviors…
Author : williamsonalyci
Background to the Study essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the research paper on your topic
"Background to the Study"
with a personal 20% discount.
Grab the best paper

Related Essays

Calendar Anomalies: Definition and Background Information
Calendar Anomalies: Definition and Background Information Calendar anomalies, or seasonal effects, as applied to stock markets can be defined as “the tendency of financial assets returns to display systematic patterns at certain times of the day, week, month or year” (Brooks 2008, p.
12 pages (3000 words) Research Paper
Specific Background Information in Relation to AIDS
This is because no country in this world has a zero percent prevalence rate of the HIV disease. With Australia, the fact that the country is found in the Oceania alone does not present a very glooming picture of HIV infection for the country. This is because according to AVERT (2010), “the number of people living with HIV in Oceania almost doubled from 28,000 in 2001 to 57,000 in 2009.” This means that unlike other regions of the world, the Oceania keep having increasing infection rates.
10 pages (2500 words) Research Paper
Proposal Background and Problem Statement
This is because it is often reported that pharmacists manufacture or hype diseases, just to counter the move by manufacturing medicines to them. This way, they make monetary gains out of the proceeds of the sales. Economically, this step is debated as a competitive strategy for the pharmaceutical industry.
3 pages (750 words) Research Paper
Cultural Background And Belief In Astrology
Astrology is a deep-seated cultural phenomenon of global significance. Although astrology lacks a solid foundation in scientific evidence, and numerous controversies surround the superstitious concept, astrology is still widely popular among several world cultures. Astrology has managed to render itself as a subject of empirical research.
8 pages (2000 words) Research Paper
Scientific background to Modern philosophy
The history of modern philosophy essentially dates back to the 17th century which was mainly driven and determined by forces such as Renaissance, metaphysics, rationalism, empiricism, idealism and pragmatism.
6 pages (1500 words) Research Paper
Developing a Quantitative Research Plan - Introduction (Opening statement, Background of the study, Problem statement, Purpose o
Being formed by legislations means that the organizations’ roles and purpose are outlined under law and failure to deliver to the expectations may amount to legal liabilities. This marks a significant difference from private institutions that may change operations to match financial constraints.
4 pages (1000 words) Research Paper
Affirmative action background
At the beginning of the XXI century, the policy of affirmative action is still of vital importance. Politics and human rights policy have changed significantly throughout the previous century. Unfortunately, not all the problems of equal opportunities at the workplace have been solved.
3 pages (750 words) Research Paper
Background information of Pepto-Bismo ( liquid Medication)
People are now storing it in refrigerators to maintain it in its actual inactive form. Under room temperature, the medication may become active and start reacting with any
2 pages (500 words) Research Paper
Research - Phase 1 - Background and Literature Review
n adoption , the perception of people with related to the usefulness, ease and trust towards using a technology which is into money transaction are been studied using various reviews of the reports of various analysts. The mm-payment services could be explained as the services
6 pages (1500 words) Research Paper
AT&T Company background
The company came to the existence during the telephone inventions by the Bell Telephone Company, making it the first telephone organization in the United States. It remained as
1 pages (250 words) Research Paper
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Rate this paper:
Thank you! Your comment has been sent and will be posted after moderation