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Cumulative Prospect Theory: An Analysis of Decision under Uncertainty
... Framing and bracketing (Chong, 2007) are two cognitive biases associated with the way individuals process and interpret information in economic decisionmaking. This theory suggests that the way information is presented can influence how individuals interpret and respond to it (Kahneman & Tversky, 2000). Individuals are more likely to choose an option presented in a positive way than one presented in a negative way, even if the end result of both options is the same. ...
... Within prospect theory, there are several key principles (Kahneman & Tversky, 2000) namely: ...
... Prospect theory has a significant impact on our understanding of economic behaviour especially in terms of (Kahneman & Tversky, 2000): ...
The COVID-19 pandemic has had a significant impact on various aspects of life, including financial markets. The cryptocurrency market, already renowned for its volatility, experienced a surge in activity and significant changes in investor behavior during this period. This research aims to analyze various economic behavioral anomalies that emerged in cryptocurrency transactions during the COVID-19 pandemic. This research uses a literature study method to identify several dominant behavioral anomalies, such as FOMO (Fear of Missing Out), Herding Behavior, Noise Trading, Overconfidence, and Anchoring Bias. These behavioral anomalies trigger extreme market volatility, asset bubbles, and financial losses for investors. This research highlights the importance of investor education, market regulation, and technology development to minimize the impact of behavioral anomalies and protect investors in the cryptocurrency market.
... For example, the availability heuristic refers to the tendency to "assess the likelihood of an event . . . by assessing the ease with which the relevant mental operation of retrieval, construction, or association can be carried out" (Kahneman and Tversky 1979). ...
... Changing Risk Beliefs or Risk Weighting? Kahneman and Tversky (1979) observe that people have "people are limited in their ability to comprehend and evaluate extreme probabilities." It is commonly overlooked that this statement captures two distinct concepts: comprehension and evaluation of unlikely events. ...
... 19 The difference between these two mechanisms can be visualized in fig. S3.5 using a probability-weighting function that translates objective probabilities p into weights π(p) used in decision making (Kahneman and Tversky 1979). It is possible to observe a decrease in gambling because people change their beliefs about the odds of winning (depicted by a change from b to a due to a change in assessed probability p) or because participants change their risk weighting for given winning odds (depicted by a change from a to c and b to d due to a vertical change in decision weight π(p)). ...
... Both publications contribute to scholars' CIS toolbox, offering techniques and conceptual frames for systematically analyzing institutions. Outside of Ostrom's works, other popular publications are Gintis (2014), Simon (1990), and Kahneman (2011), and Kahneman and Tversky (2013). While Ostrom's works referenced in Cluster #2 are focused on tractably identifying and measuring various institutions and their occurrence in social situations, the other commonly cited authors are more oriented on decision-making of the individual. ...
... While Ostrom's works referenced in Cluster #2 are focused on tractably identifying and measuring various institutions and their occurrence in social situations, the other commonly cited authors are more oriented on decision-making of the individual. Gintis argues the importance of game theory in understanding social systems (Gintis 2014), while Simon (Simon 1990) as well as Kahneman and Tversky (Kahneman 2011;Kahneman and Tversky 2013) identify patterns of 'nonrational' decision-making by individuals. ...
Computational Institutional Science (CIS) is an emerging stream of social science research performing institutional analysis with computational methods. While such scholarship is garnering increased attention, it draws on many different theories and engages disparate disciplinary backgrounds. Thus, this article provides an overview of CIS articles utilizing agent-based modeling, a computer simulation experiment method, to better understand critical theoretical lenses and topics. More specifically, this article clusters and analyzes 148 articles based on commonalities and differences empirically derived from their overlapping citations (i.e., citation cluster) and abstract content (i.e., topic cluster). Based on our analysis, we discuss the trends observed across cluster types and the overlap between them to better situate CIS inquiry.
... Loss aversion, as proposed by Tversky and Kahneman (1979), suggests that in tournaments people do not assign equal value to gains and losses. Consequently, losses are given significantly more weight than gains. ...
... This suggests that the lagging team may be strongly motivated to take bigger risks. Furthermore, a tie score leads to significantly fewer shots on target than when a team is leading the match, and a high lead tends to increase shots on target compared with those attempted by one-goal-leading teams, further suggesting players' loss aversion (Tversky and Kahneman, 1979). ...
Within the context of professional football, we examined the impact of the interim game state on risk-taking and performance during a dynamic tournament. This study used 9,256 segments from the top five European football leagues as samples. These segments were derived from 1,826 games played during the 2017–2018 season. Poisson regression was employed to analyze the distinct effects of game state and heterogeneity on performance under pressure. The results indicated that stronger teams tended to increase their attack intensity when facing weaker opponents. However, as their lead expanded, they tended to reduce their attack intensity, particularly in matches with heterogeneous characteristics. Moreover, teams trailing in scores tended to intensify their attacks but achieved little. However, leading teams consistently underperformed in terms of blocked shots and corner kicks. Additionally, tied teams systematically exhibited lower performance in shots on target and free kicks compared to leading teams, despite having a higher motivation to excel. These findings extend our understanding of how risk-taking and performance depend on disclosing information regarding relative performance.
... utility given the other observers' strategies. The reliance of the generalized (and the classical) model on the maximization assumption implies that it is likely to be violated by inexperienced players (for discussions of violations of the maximization assumption, see Kahneman &Tversky, 1979, andThaler, 1987). Yet, the success of classical SDT suggests that the model may provide a useful approximation of behavior after extended experience. ...
... utility given the other observers' strategies. The reliance of the generalized (and the classical) model on the maximization assumption implies that it is likely to be violated by inexperienced players (for discussions of violations of the maximization assumption, see Kahneman &Tversky, 1979, andThaler, 1987). Yet, the success of classical SDT suggests that the model may provide a useful approximation of behavior after extended experience. ...
Perceptual decisions are often made in complex social settings in which distinct observers can affect each other. To address such situations, I. Erev, D. Gopher, R. Itkin, and Y. Greenshpan (1995) proposed a formal extension of signal-detection theory and a descriptive modification of the extended theory. The current article presents 2 experiments that were designed to test these models in the context of repeated 2-person perceptual safety games. In both experiments, pairs of participants performed a simulation of an industrial-production process under distinct payoff rules. Each participant had to try to produce as much as possible while avoiding costly accidents. In line with the descriptive model's predictions, the results showed a slow adjustment to the incentive structure that can be approximated by a reinforcement learning process among different perceptual cutoff strategies. Providing players with prior information about the game had an initial effect but did not alter the pattern of the results.
... Real estate market individual and information structure influence the decision of investment. Some of the investment sometimes show negative results to investors for that purpose they invested or they are not satisfied results from their investment due behavior of investors about investment (Kahneman & Tsersky, 1979). So Behavioral finance it tries to study that the description of investors who are interested about finding how individual emotions or behavior is related to drive share prices when investing in real estate. ...
The issue of behavioral finance in investment has become the center of debate recently. Several factors has been included while making decision to invest and how does it influence while residential investors makes their investment decision. The existence of these factors is thought to be helpful to the investors in reducing their irrationality in investment decision. However, in recent years it has been observed that there is a sudden increase in the home owners that tends to boost up the level of the economy in Tanzania. This study was set to evaluate the behavioural factors influencing residential investors in investment decision in Tanzania.
Quantitative research approach was adopted and close-ended questionnaire were conducted with investors from their investment opportunity that they have taken. Other data were collected from published reports basing on their behavioural factors.
The study discussed the following behavioural that were adopted by different investors while making their investment decision, those factors include herding, prospects and heuristics factors. The study indicate that heuristics and prospect has played significantly roles in behavioural factors that influences the residential investors in investment decision making. Therefore, it was concluded that only prospects and heuristics have an influence in investment decision making compared to herding which has no influence in investment decision-making.
The study affirms on the vitality of each investors having an active investment decision that they have undertake. The research have concluded on each parameter in each objective. But most and the main recommendation was all about improving their valuation techniques while making their investment decision.
... Hyperbolic discounting prioritizes immediate pleasure over long-term consequences, making even individuals aware of health risks struggle to resist the urge to use tobacco ( [51]). Prospect theory adds another layer, highlighting the amplified loss aversion associated with quitting, making the perceived pain of giving up outweigh the anticipated health gains ( [52][53][54]). Further complicating matters, habit formation creates neural pathways that reinforce addictive behavior, pushing individuals toward automatic consumption beyond purely rational choices ( [55]). ...
Deterrent taxes are a crucial policy tool for reducing the consumption of harmful products like tobacco and alcohol. However, assessing dissuasive taxes impact different income groups is important to ensure that their burden is not disproportionately borne by low-income households. This study examines the effectiveness of deterrent taxes as an economic policy tool for reducing tobacco and alcohol consumption in Cameroon. We analyse the impact on household welfare and distributional effects using microsimulation analysis. The data come from the Cameroon Household Living Conditions Survey and the 2022 tax records. Our methodology is based on a dynamic computable general equilibrium (CGE) model enriched with an addiction model. The results indicate that deterrent taxes can significantly reduce the consumption of these harmful products but also have regressive effects on low-income households. In response, we recommend the adoption of a progressive tax structure and the establishment of targeted support programmes to mitigate the negative impact on vulnerable populations.
... Loss aversion is a cornerstone concept in behavioral economics that describes individuals' tendency to prefer avoiding losses rather than acquiring equivalent gains (Kahneman & Tversky, 1979). This phenomenon has been extensively studied to understand its implications for investment decisions. ...
This research paper aims to investigate the profound impact of loss aversion on individual investment decision-making, with a specific focus on its influence on risk preferences. Loss aversion, a key concept in behavioral economics, posits that individuals experience a greater psychological impact from losses than equivalent gains, thereby shaping their decision-making processes. The study employs an empirical approach, utilizing a diverse sample of individual investors to analyze how loss aversion interacts with risk preferences and influences investment choices. The research methodology involves a combination of surveys and data analysis to explore the intricate relationship between loss aversion and risk preferences. By examining real-world investment decisions in various market conditions, the study seeks to identify patterns and behavioral tendencies that emerge when individuals confront potential losses in their investment portfolios. The research design also considers demographic factors, financial literacy, and other relevant variables to provide a comprehensive understanding of the factors influencing investment choices. Ultimately, this study aims to enhance our comprehension of the psychological factors driving individual investment decisions and to inform the development of strategies that mitigate the negative impacts of loss aversion on financial outcomes.
... Numerous investigations utilize various hypotheses to clarify the motivations behind tax compliance and evasion. Several theories that have been proposed include the Prospect Theory (Kahneman & Tversky, 2012) and the Deterrence Theory (Traxler, 2014). Their main objective is to elucidate tax evasion in circumstances characterized by risk and ambiguity. ...
This study examines how taxpayer egoism affects the relationship between tax evasion intention and its determinants. Tax evasion intentions are assessed both as a composite variable and a latent variable. This study evaluates the direct relationship between attitude, subjective norm, & perceived behavioral control on tax evasion intentions. Furthermore, this study used taxpayer egoism as a mediating variable. All variables used are in accordance with the perspective of the Theory of Planned Behavior. This research uses Ordinary Least Square (OLS) using SPSS and Partial Least Square using smartPLS to examine the mediation between the independent variable and the dependent variable. The results showed that taxpayer egoism has a positive effect on tax evasion intentions. This result is consistent with OLS Results that show the positive effect of taxpayer egoism on tax evasion intention. The direct effect of all seven determinants of tax evasion intention on tax evasion intention is statistically significant. Moreover, all seven factors that determine the intention to engage in tax evasion have a statistically significant effect on tax evasion intention through the phenomenon of taxpayer egoism.
... Negative information also necessitates more cognitive processing, resulting in deeper encoding and stronger memory formation (Vaish et al., 2008). In the realm of decision-making, loss aversion, a key concept in prospect theory (Kahneman and Tversky, 1979), suggests that individuals tend to strongly prefer avoiding losses over acquiring gains. This often leads to more pronounced avoidance behaviours following the exposure to a negative stimulus, in contrast to approach tendencies associated with a willingness to engage after contact with a positive stimulus or situation (Scerrati et al., 2023). ...
Introduction
This study examines the consistency between subjective similarity evaluations and the theoretical predictions derived from Tversky’s ratio model of similarity, alongside the impact of additional positive and negative features on perceived similarity to ideal and bad politicians.
Methods
Using a sample of 120 participants, we assessed the similarity of eight candidate profiles to an ideal and bad politician, varying in positive and negative features. Participants’ subjective evaluations were compared with theoretical predictions derived from Tversky’s ratio model. The analysis focused on how candidate and referent valence influenced observed versus theoretical similarity.
Results
Subjective similarity judgments deviated systematically from theoretical predictions, especially for positively featured candidates, indicating a negativity effect. Additional positive features decreased the perceived similarity of favorable candidates to an ideal politician, while additional negative features did not significantly affect similarity judgments of unfavorable candidates.
Discussion
Our findings underscore a significant disparity between subjective and objective similarity judgments, notably for favorable candidates. While the ratio model performs well for unfavorable candidates, its applicability diminishes for favorable ones, emphasizing the role of feature valence in decision-making. Further research on feature valence is crucial for a comprehensive understanding across contexts.
... Com o passar do tempo emergiram estudos sobre a influência da psicologia no que se refere a utilização do dinheiro, cujos resultados normalmente demonstraram que a população possui comportamentos irracionais quanto à tomada de decisão (KAHNENMAN; TVERSKY, 1979;RITTA, 2012;FAVERI;KNUPP, 2018). Diferentes fatores impulsionam tanto a busca pelo dinheiro quanto a sua utilização, de modo que elementos como baixa renda, gastos, concessão de crédito e desemprego tendem a ocasionar o endividamento. ...
RESUMO A pesquisa realizada teve por objetivo relacionar as diferentes percepções do dinheiro e a propensão ao endividamento dos discentes da graduação em ciências contábeis numa instituição federal. Este estudo se caracteriza como uma pesquisa descritiva de abordagem quantitativa operacionalizada por meio de uma survey com corte transversal aplicada a 172 alunos de uma instituição federal. O questionário foi aplicado nos meses de março e abril de 2021, com base na Escala do Significado do Dinheiro e de Propensão ao Endividamento. Os dados foram analisados mediante testes estatísticos univariados, bem como o teste de Shapiro-Wilk, testes não-paramétricos e regressão linear múltipla. O significado do dinheiro não se mostrou significativo em relação à propensão ao endividamento. As variáveis demográficas e econômicas relacionadas a gênero, financiamento/empréstimo em atraso e atraso no pagamento do cartão de crédito apresentaram relação com a propensão ao endividamento. O significado do dinheiro concernente a estabilidade e progresso obtiveram as maiores médias enquanto o fator sofrimento obteve a menor média. Em relação ao endividamento, os discentes evidenciaram saber da importância do cuidado com suasfinanças, o que reforça a premissa de que quanto maior o nível de conhecimento, menor o nível de endividamento.
... Esto se explicó en la función de valor propuesta por Kahneman & Tversky en el 2000 en donde se reflejó que el valor marginal era decreciente de ganancias y pérdidas, en donde se aclararon cuestiones como las expuestas previamente en la venta de acciones con pérdidas o beneficios, también al por qué las inversiones en acciones producen una rentabilidad mayor a la que otorgan los bonos si se habla del largo plazo, o explicaría la razón del por qué muchas empresas siguen pagando dividendos si el pago de sus tributos es mayor que esos beneficios que obtienen. Las reacciones son diferentes en todos los contextos y no siempre se trata de racionalidad (Kahneman & Tversky, 1979). ...
Las finanzas comportamentales han sido todo un desafío para la racionalidad en la toma de decisiones financieras que indica la economía tradicional, ya que se asume que tal y como se presenta la información sería la base fundamental para tomar la decisión. El objetivo de la presente investigación consiste en identificar cómo afecta la aversión al riesgo las decisiones de tipo financiero a estudiantes de IV semestre de administración de empresas a través de un estudio experimental. De acuerdo con lo anterior, se ha llevado a cabo un estudio con alcance exploratorio a través de un acercamiento con la muestra escogida que son los 30 estudiantes de IV semestre de administración de empresas de la Corporación Unificada Nacional de Educación Superior [CUN] para realizar el diseño experimental que arroja como resultado principal que el sesgo de aversión al riesgo es evidente en el proceso de toma de decisiones financieras, ya que se presentó una mayor inversión en el escenario de pérdidas, permitiendo concluir que los individuos prefieren dejar pasar una mayor utilidad antes que perder todo lo invertido independientemente del escenario, sea este de boom financiero o de quiebra. Es decir, que la muestra poblacional puede asumir un nivel de riesgo constante, aunque los precios de los activos suban o bajen o independiente de su nivel de conocimiento sobre los mercados financieros.
Palabras clave: Decisiones financieras, aversión al riesgo, sesgos cognitivos, finanzas conductuales.
... Therefore, agents will, under uncertainty, try to prevent the downside risk of loss, or possibility of loss, rather than maximising utility . 15 This explains why poor people, labouring under uncertainty and possible loss, will insure and take risk (speculate) at the same time, at a high cost . 16 In trying to avoid endemic losses in unreduced uncertainty, the poor will therefore be prone to risk-taking behaviour in overvaluing and choosing small probable winnings at great cost, thus lowering consumption even further. ...
The formal banking system plays a pivotal role in the delivery of financial services, particularly credit. However, the delivery of credit to poor households in South Africa by the formal banking system is hampered by the existence of irreducible uncertainty. The article analyses a sample of successful practices in different countries to determine the genotype structure in these cases that support specific social technology and the minimalist solidarity group lending method, to transform financial uncertainty that cannot be solved by the market mechanism and even brokerage institutions like banks. Based on the findings, this article recommends that existing social technology can be developed in an environment created and conditioned by a proposed system of constituents or principles, to give the poor access to low-cost credit in South Africa.
... Difficult tasks are more challenging for contributors to complete and receive rewards. Because of loss aversion, people may overestimate their efforts and potential losses in difficult tasks failure (Kahneman & Tversky, 1979). Thus, their perceived reward uncertainty may be higher for a more difficult task. ...
... У 1968 році лауреат Нобелівської премії Гері Беккер опублікував роботу «Злочин і покарання: економічний підхід» [1], в якій психологічні фактори були враховані в ухваленні економічних рішень. У 1979 році вчені з когнітивної психології Даніель Канеман та Амос Тверські (Kahneman Daniel and Tversky Amos, 1979) опублікували роботу «Теорія перспектив: вивчення процесу прийняття рішень в умовах ризику» [2], яка узагальнила емпіричні спостереження. Після 1980 року почала активно розвиватися поведінкова теорія ігор. ...
An analysis of the behavioral aspects of decision-making in the financial market was carried out and the main theoretical approaches to explaining behavioral differences in the decisions of financial agents were considered. The role of cognitive biases, heuristics, behavioral illusions, and psychological factors in the formation of decisions of investors and financial market participants is summarized. Behavioral effects in making financial decisions are systematized according to their common characteristics. The importance of psychological factors in the formation of trends and price dynamics on the market has been proven. Significant aspects that determine the behavioral approach to financial transactions and affect the effectiveness of investment and portfolio management are revealed. The dependence between the features of a person’s mental activity and the ability to make logical rational decisions has been revealed. The role of cognitive biases in protecting an individual from excessive amounts of information and its simplification is substantiated.
... Over all quantiles, contemporaneous returns are the most important factor consistent with behavioral theories, in particular, those of affect and representativeness. 9 Contrary to Badshah (2013), we find no convincing evidence for loss aversion because extreme changes in the left tail do not seem to have a systematic higher impact than those in the right tail (Kahneman and Tversky 2013). Altogether, we find a significant negative contemporaneous return-volatility relationship on the intraday level for individual equity. ...
We implement the VIX methodology on intraday data of a large set of individual equity options. We thereby consider approaches based on monthly option contracts, weekly option contracts, and a cubic spline interpolation approach. Relying on 1 min, 10 min, and 60 min model-free implied volatility measures, we empirically examine the individual equity return–volatility relationship on the intraday level using quantile regressions. The results confirm a negative contemporaneous link between stock returns and volatility, which is more pronounced in the tails of the distributions. Our findings hint at behavioral biases causing the asymmetric return–volatility link rather than the leverage and volatility-feedback effects.
... It is interesting that the appearance of disposition effect appears to be insensitive to experimental interventions aimed at modifying projected future gains or losses. This robustness of the disposition effect in influencing investors' decision-making processes is highlighted by its resistance to experimental modifications [26]. ...
For a considerable amount of time, conventional finance theories have maintained that investors make judgments based on logical analyses and economic models. But the development of behavioral finance casts doubt on this notion, showing that emotions, cognitive biases, and natural tendencies frequently influence human decision-making. This study looks into familiarity bias, a psychological component that affects investor decisions, and how common it is. Using a thorough methodology, the study examines investor choices in the banking, FMCG, and auto mobile industries. Results repeatedly point to a considerable preference for well-known businesses, even in situations when risks and returns on investment are similar. Investors exhibit behavioral biases and brand loyalty; familiarity bias is particularly persistent across various investor profiles. The findings show that investors, irrespective of expertise level, devote a sizeable chunk of their capital to reputable businesses. The results of hypothesis testing show relationships between gender and familiarity bias as well as between different investor types according to holding length and risk. However, monthly income did not show a significant correlation with familiarity bias, indicating that it is prevalent at different income levels. The study comes to the conclusion that a thorough understanding of investor decision-making requires an awareness of behavioral biases.
... In addition, prospect theory assumes that options without risk will be chosen more often than options containing risk, even if the probability of risk is very low. Because a person tries to eliminate the risk completely, not reduce or minimize the existing risk (Kahneman & Tversky, 2013). ...
The growth and development of the manufacturing industry certainly has a positive impact because it increases employment, but it is directly proportional to the increase in work accidents. Most of the causes of work accidents are unsafe behavior. Unsafe behavior is caused by several factors and risk perception is an important part of it. Risk perception is relevant to safety because it can influence behavior that can influence the likelihood of accidents. This study aims to determine the effect of safety leadership, safety knowledge, and safety attitudes on perceived risk probability and perceived risk severity. This research was conducted at PT Linggarjati Mahardika Mulia in 2022. The sample used in this study was 315 respondents and used non-probability sampling techniques through a purposive sampling approach. The data analysis technique in this study used structural equation modeling with SEM-PLS and WarpPLS 8.0. The results confirmed that safety leadership has a positive effect on perceived risk probability and perceived risk severity. Safety knowledge has a positive effect on perceived risk probability and perceived risk severity. Safety attitude has a positive effect on perceived risk probability and perceived risk severity.
... Opinions may also be influenced if the rationale is framed in terms of the losses that the intervention is intending to prevent. Loss aversion 36 can explain why penalty frames are sometimes more effective than reward frames in motivating people 37 . This suggests that framing the consequences of not using an intervention in a negative way (i.e., as a loss) could improve people's perceptions of it. ...
Despite their increasing use, choice architecture interventions have faced criticism for being possibly manipulative and unethical. We empirically explore how an intervention’s acceptability differs by the type of intervention used, by the domain, and by the way in which its implementation and benefits are explained. We employ a 5 × 5 × 5 factorial design with three fully crossed predictor variables: domain, type of intervention, and explanation. We measure participants’ acceptance of the proposed intervention, perceived threat to autonomy and freedom of choice, and belief that the intervention will be successful. We hypothesized that acceptability of the intervention and perceived threat to autonomy will change as a function of the type of intervention used, the domain in which it is implemented, and the rationale for which its use is presented. We find that acceptability of the intervention, perceived threat to autonomy, and belief that the intervention will be successful differ by the type of intervention used and by the domain in which it is implemented. The rationale for the use of the intervention appears to change acceptability of the intervention depending on the type of intervention that is being used, and the domain in which it is implemented. Exploratory analyses were conducted to investigate differences between specific levels within factors, and interactions between factors. Given the variation in acceptability across the three factors, we believe that the discourse about the ethics of choice architecture should avoid generalizations and should instead be at the level of individual interventions in a specific situation. We conclude with a discussion about areas for future research.
Protocol registration
The stage 1 protocol for this Registered Report was accepted in principle on 14 October 2022. The protocol, as accepted by the journal, can be found at: https://doi.org/10.6084/m9.figshare.21758666 .
... A completely different concept of understanding consumer behavior is revealed in the so-called behavioral economics. Its ideological foundations were laid by Kahneman and Tversky (1979) (Braeutigam & Kenning, 2022;Hubert & Kenning, 2008) The research by Chen and Peng (2023) "Antecedents to Consumers' Green Hotel Stay Purchase Behavior during the COVID-19 ...
The article is devoted to the study and modeling of the behavior of Ukrainian consumers in the tourist services market in the context of the Russian military invasion of Ukraine. The authors conducted a study of current global market trends in the aspect of the functioning of the industry in the conditions of war in Ukraine. The authors identified prospects for the restoration and development of the tourist services market in the context of further stabilization and improvement of the situation in Ukraine. The article analyzes the potential and realized consumer demand in the market of tourist services in Ukraine. The authors analyzed the results of a survey of tourism business professionals, as well as consumer requests, in order to establish changes in consumer preferences over the past 5 years. Based on the use of the SARIMA model, the authors calculated the forecast values of the frequency of consumer requests for specific tourist destinations 12 steps ahead. The results obtained in the course of the study confirmed the hypothesis of stable consumption of tourist services by Ukrainian consumers.
O crescimento dos mercados faz com que novas formas de crédito sejam requeridas. Em meio ao clima de pandemia, muitos brasileiros perderam algum nível de poder aquisitivo por causa do fechamento de organizações, aumento da inflação e por consequência os aumentos dos bens de consumo. Isso fez com que muitos procurassem por opções que os auxiliassem a ter um tempo a mais para pagar as contas e por conta do distanciamento social, muitos migraram para a compra online, utilizando os meios de pagamentos alternativos ao dinheiro, como o cartão de crédito, por exemplo. O cartão de crédito facilita uma compra quando as pessoas não dispõem de recursos imediatos para seu pagamento, mas muitos não têm o conhecimento necessário para utilizar os novos formatos de pagamentos, o que pode leva-los a um possível endividamento acarretando preocupações e perda de qualidade de vida. Por conta disso, o objetivo desta pesquisa é verificar quais os possíveis impactos que o uso do cartão de crédito acarreta na vida das pessoas e se o ensino da educação financeira influencia no endividamento e qualidade de vida dos indivíduos da geração Z. A metodologia utilizada é de caráter quantitativo, os dados foram colhidos por meio de um questionário fechado e a técnica de análise de dados foi a descritiva. A amostra foi separada em dois grupos: geração Y e geração Z, como forma de comparação entre os respondentes da amostra. Os resultados indicaram que a geração Z, mesmo não possuindo grande número de dívida por conta de gastos no cartão e em outras operações financeiras, ainda assim é afetada pela perda da qualidade de vida por conta de sentimentos como o estresse, a tristeza e o desanimo, em comparação com a geração Y.
In economics, efforts to analyze economic relations with mathematical methods have increased since the early 1960s. The majority of these efforts are economic studies on econometrics. In simple terms, economics is the struggle of individuals to meet their needs and wants by using scarce resources. The measure of an individual's ability to utilize scarce resources is the size of his/her wealth. In economics, individuals struggle to accumulate wealth for themselves and their future generations. The wealth of each individual can be defined as the difference between “assets” and “liabilities” at moment “t”. As can be seen, “debt”, which is the main component of wealth, is another individual's “asset”, and wealth at moment “t” may fulfill more or less needs and wants than wealth at moment “t+1”. These complex economic relationships show that it is very important to conduct economic analysis by expressing the wealth of individuals in mathematical form.
This study investigates the framing effect on the willingness to pay (WTP) for the consumption of organic foods, particularly organic tomatoes. In addition, we evaluated how other variables, such as the respondent's socioeconomic characteristics, as well as their organic consumption pattern and their perceptions about organic foods, impacted the WTP for organic tomatoes. Results are based on data from an online survey applied to 434 consumers and on estimates of regression models for the expected WTP with and without control for the selection of people willing to pay a price premium for organic tomatoes. Two framing effects are tested-one with positive information about organic tomatoes and a second with negative information about a conventional product. While both types of framing had significant effects, negative framing played a more important role in the willingness to pay for organic tomatoes. Results also highlighted how other variables, such as income, positive perception about organic products and production, and environmental and health concerns, impacted the WTP for organic tomatoes.
Sustainable consumption is an issue that firms try to encourage through different tools. A common approach to influencing environmental consumer behaviors and attitudes is message framing. Specifically, gain-frames highlight the benefits of engaging in a behavior, while loss-frames emphasize the costs of not doing so. The goals of this study are twofold: to examine the effects of sustainable message framing on customer engagement intention and to investigate the moderating effect of attitude towards sustainable message on this relationship. An experimental study was conducted with 66 participants equally distributed between two framing groups. Drawing on the prospect theory, it was proposed that, compared to loss-framed messages, gain-framed brand messages on social media may produce higher customer engagement intention. Based on the theory of customer engagement marketing, it was anticipated that increases in the level of additional attitude towards sustainable message could strengthen the effect of gain message framing. Results provide empirical support for both hypotheses.
Mobile health applications (mHealth apps) are widely used for supporting individuals in achieving health-related goals. While various strategies such as reminders and financial incentives have been explored, the impact of verification systems on goal achievement remains understudied, particularly in the context of mHealth apps. This study investigates the effects of a dual verification system on goal outcomes, which require users to submit proof photos before and after activities. Using a difference-in-differences (DID) with matching technique, we examine whether increased verification steps hinder users’ commitment to self-development goals. Drawing upon friction theory, our findings suggest that implementing a dual verification system negatively influences goal achievement rates due to increased friction. Moreover, we find that the effect varies based on users’ engagement patterns and deposit amounts. Our study contributes to understand the effects of verification systems on users’ goal achievement and provides practical insights for designing personalized verification strategies in mHealth apps.
This chapter provides an introduction to the theoretical lenses and methodological framework applied consistently throughout the practical examples included in the book, centred around the key concepts of resources and agents, and modelling and simulation of their interactions.
This approach is supported by the resource-dependence theory and resource-based theory, the behavioural decision theory and the anticipatory systems theory, and by qualitative and quantitative system dynamics and agent-based modelling and simulation apparatus.
Also, the chapter highlights the key complex adaptive features of the socioeconomic systems and gives an overview of their characteristics within the context of important spheres of society like healthcare and pharmaceuticals, financial markets, art, culture and sociology, public education and social networks.
This research work is motivated by the need for effective demand response management (DRM) in smart grid systems. DRM is critical in optimizing the energy load by adjusting the energy prices and shifting high electricity demand to off-peak periods. This paper introduces a novel DRM model in a multi-user multi-utility company environment, considering the risk and uncertainty stemming from potential excessive energy demands, where each utility company is treated as a Common Pool of Resources (CPR). The risk-aware behavior of the consumers is captured using the Prospect Theory principles. Specifically, to model the interactions, we formulate a multi-leader multi-follower Stackelberg game involving the utility companies as leaders and the consumers as followers. The goal is to determine the optimal energy prices for the utility companies and the optimal amount of energy that each consumer purchases from these companies, considering their distributed decision-making process and exploring the non-cooperative Game Theory. The proposed DRM framework is assessed through numerical results, demonstrating its operational and performance efficiency. The results highlight the key benefits and tradeoffs of our model in comparison to alternative DRM strategies, emphasizing the significance of the presented approach in managing demand response effectively.
Luxury consumption is typically associated with notions of excessive spending, irrational behavior, and selfindulgence, which are often seen as contradictory to sustainability principles. However, the luxury sector is undergoing significant evolution and growth, driven by the adoption of sustainable practices and the emergence of the circular economy concept within the industry. Despite limited research addressing the perceived mismatch between luxury and sustainability, there is growing recognition of the value derived from the intersection of these two domains, both at individual consumer levels and within broader economic contexts. As an increasing number of consumers opt for sustainable luxury in specific circumstances and endorse circular economy principles, there is a pressing need for further exploration and understanding of this complex relationship. This exploratory study aims to investigate how sustainable luxury is perceived and to shed light on the intersection between luxury and sustainability while providing insight into the current sustainable luxury landscape from the perspective of luxury shoppers in Turkey. To develop an understanding of the topic, the paper builds on research on luxury consumption and extends it by integrating insights from 12 semi-structured interviews with luxury consumers. The findings provide insights for luxury brands to adopt and improve their sustainable management strategies.
Social media has become a powerful conduit for misinformation during major public events. As a result, an extant body of research has emerged on misinformation and its diffusion. However, the research is fragmented and has mainly focused on understanding the content of misinformation messages. Little attention is paid to the production and consumption of misinformation. This study presents the results of a detailed comparative analysis of the production, consumption, and diffusion of misinformation with authentic information. Our findings, based on extensive use of computational linguistic analyses of COVID-19 pandemic-related messages on the Twitter platform, revealed that misinformation and authentic information exhibit very different characteristics in terms of their contents, production, diffusion, and their ultimate consumption. To support our study, we carefully selected a sample of 500 widely propagated messages confirmed by fact-checking websites as misinformation or authentic information about pandemic-related topics from the Twitter platform. Detailed computational linguistic analyses were performed on these messages and their replies ( N = 198,750). Additionally, we analyzed approximately 1.2 million Twitter user accounts responsible for producing, forwarding, or replying to these messages. Our extensive and detailed findings were used to develop and propose a theoretical framework for understanding the diffusion of misinformation on social media. Our study offers insights for social media platforms, researchers, policymakers, and online information consumers about how misinformation spreads over social media platforms.
Purpose: The general purpose of the study was to explore the impact of information provision on decision making. Methodology: The study adopted a desktop research methodology. Desk research refers to secondary data or that which can be collected without fieldwork. Desk research is basically involved in collecting data from existing resources hence it is often considered a low cost technique as compared to field research, as the main cost is involved in executive’s time, telephone charges and directories. Thus, the study relied on already published studies, reports and statistics. This secondary data was easily accessed through the online journals and library. Findings: The findings reveal that there exists a contextual and methodological gap relating to information provision on decision making. The study offered significant insights into how information provision impacts decision-making across various domains. Through comprehensive review and synthesis of empirical evidence, it emphasized the crucial role of information quality and accessibility in shaping decision outcomes. Tailoring information provision strategies to diverse stakeholders' needs was highlighted, alongside the bidirectional relationship between information processing and decision outcomes. Ethical considerations, such as transparency and privacy, were stressed to ensure equitable decision outcomes. The findings underscored the transformative potential of effective information provision, offering actionable insights for stakeholders. Interdisciplinary collaborations and evidence-based interventions were advocated for driving positive societal change. Unique Contribution to Theory, Practice and Policy: The Information Processing theory, Theory of Planned Behaviour and Social Exchange theory may be used to anchor future studies on information provision on decision making. The study offers comprehensive recommendations across theoretical, practical, and policy domains. It calls for further theoretical exploration into cognitive processes underlying decision-making and interdisciplinary collaboration. Practically, it advocates for tailored information provision interventions that match diverse decision contexts and user preferences, alongside transparent and accessible information dissemination practices. Policy-wise, the study urges evidence-based communication strategies, regulatory frameworks promoting transparency and accountability, and educational initiatives fostering information literacy. These recommendations aim to empower individuals, organizations, and policymakers to navigate information landscapes effectively, promote informed decision-making, and address information inequalities. Keywords: Information Provision, Decision-Making, Stakeholders, Ethical Considerations
The article summarized and upgraded the research material dealing with agent modeling of entity behavior in active (man to man) viable systems. Aspects of emotional and behavior counterpart responses were studied in modeled social and economic processes of production contract implementation. The authors took into account the impact of dominating psycho-sociological styles of actor behavior included in the hierarchy of production interaction in case of asymmetric information and schemes of classical opportunism. The essence and location of psychological contracts in the process of concluding and implementing labour contracts were specified. 3D models of ‘principal – agent’ and ‘principal-manager-agent’ interactions were built with due regard to emotional responses and motivating decisions of process participants. The authors present the model, which can interpret actor interactions in the form of replacing each other chains of emotions and steps, which in case of graphic presentation of the process will be located in sequence on both sides of the Mebius loop analogues. The benefits of using KL-models and KM- and OK-functions in modeling emotional actor reaction in response to counterpart behavior were demonstrated. To provide better clearness necessary illustrations, schemes and graphs of two- and three-actor interactions were supplied. The provided schemes of iteractive processes of dynamic actor interactions allowed the authors to develop and effectively use software of modeling the emotional tone of hierarchical relations of entities in researching models of viable organization functioning. The developed mathematic tools got a certificate of state registration of computer databases and programs.
Zusammenfassung
In diesem Kapitel werden Ansätze und Messverfahren zur Erfassung der Risikowahrnehmung und der Risikoeinstellung erörtert. Aus methodischer Sicht wird das psychometrische Paradigma zur Messung der subjektiven Risikowahrnehmung vorgestellt und vom objektiven (bekannten) Risiko aus der vorherrschenden ökonomischen Entscheidungstheorie abgegrenzt. Dabei werden eigene empirische Befunde aus einer repräsentativen Bevölkerungsstudie zur Risikowahrnehmung und Reiseabsicht während der Coronapandemie aus psychometrischer Perspektive präsentiert. Dieses Forschungsprojekt wurde im Rahmen des Nationalen Forschungsprogramms „Covid-19“ (NFP 78) des Schweizerischen Nationalfonds (SNF) durchgeführt (Grant-N° 40784P_198336). Zum Schluss des Kapitels werden Ansatzpunkte für die evidenzbasierte Interventionsforschung für sicheres Reisen vorgestellt, die auf Theorien und Ergebnissen aus empirischen Studien gründen und denen somit Wirksamkeit attestiert werden kann.
This academic study examines the evolving hospitality sector in Kosovo to identify the significant impact of accounting on complex business decisions. By adopting a multifaceted approach that includes financial analysis, evaluation of financial reports and extensive interviews, it reveals how accounting serves not only as a regulatory tool but also as a strategic partner in pricing, investment and long-term planning. The report highlights the importance of accounting and reporting systems in increasing transparency, building investor confidence and managing risk in the hospitality sector in Kosovo. The findings contribute to improvements in accounting practices and a better understanding of the role of accounting in a dynamic business environment.
A sensor observes an underlying state of nature in noise, computes a posterior probability of this state, and provides this posterior as a recommendation to a human decision-maker. The human then makes decisions based on this recommendation. By recording these human decisions over time, how can a quickest detector detect a change in the underlying state? This paper addresses the above human-sensor interface problem. This framework generalizes classical quickest detection since the detector only has access to
human decisions
rather than noisy signals with known statistical properties. We utilize a Quantum Decision Theory model (widely studied in mathematical psychology) to capture pecularities of human decision making. We provide theoretical guarantees for the quickest detector’s optimal policy, such as a threshold structure, a bound on performance, robustness to variations in the decision-model parameters, and increased performance under ‘rational’ human decisions. Finally, we illustrate a numerical implementation of this quickest detector in the context of the Prisoner’s Dilemma problem, in which it has been observed that Quantum Decision Theory can uniquely model empirically tested violations of the sure-thing principle.
Markus and Robey, in their seminal paper, assert that good theory guides research and when appropriately used it increases the likelihood that Information technology will be implemented with desirable results in any organization. This laments the importance of using theory in information systems research because of explanations it provides and paying attention to other areas that might otherwise be ignored. Researchers in the IS field such as Gregor, Grover, Corley and Gioia, Weber, and Whetten have discussed and classified theory and what constitutes a theoretical contribution. Despite the importance that many researchers ascribe to theory and theorising, the development of new theory and the refinement of existing theories there's a belief the information systems discipline has neglected theory and theorising. This, however, suggests that there's enough guidance on theory and theorising within the IS field and it is documented for different contexts and boundaries.
Understanding how helpful a visualization is from experimental results is difficult because the observed performance is confounded with aspects of the study design, such as how useful the information that is visualized is for the task. We develop a rational agent framework for designing and interpreting visualization experiments. Our framework conceives two experiments with the same setup: one with behavioral agents (human subjects), and the other one with a hypothetical rational agent. A visualization is evaluated by comparing the expected performance of behavioral agents to that of a rational agent under different assumptions. Using recent visualization decision studies from the literature, we demonstrate how the framework can be used to pre-experimentally evaluate the experiment design by bounding the expected improvement in performance from having access to visualizations, and post-experimentally to deconfound errors of information extraction from errors of optimization, among other analyses.
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