Marketing Papers
Title
Multi-Attribute Loss Aversion and Reference Dependence: Evidence from the Performing Arts Industry
Document Type
Technical Report
Date of this Version
2017
Publication Source
Management Science
Volume
64
Issue
1
Start Page
421
Last Page
436
DOI
10.1287/mnsc.2016.2605
Abstract
We study the prevalence of multiattribute loss aversion and reference effects in a revenue management setting based on data of individual-level purchases over a series of concert performances. The reference dependence that drives consumer choice is not only based on the price but also on observed sales (as a fraction of the seating capacity) during their past visits. We find that consumers suffer from loss aversion on both prices and seats sold: consumers incur significant utility loss when prices are above their references or when the actual seat sales are lower than their references. We suggest pricing policies that can address consumer decisions driven by such reference dependence and loss aversion.
Copyright/Permission Statement
Originally published in Management Science © 2017 INFORMS
This is a pre-publication version. The final version is available at http://dx.doi.org/10.1287/mnsc.2016.2605
Keywords
multiattribute reference dependence, loss aversion, capacity-reference levels, empirical operations management, marketing
Recommended Citation
Tereyağoğlu, N., Fader, P. S., & Veeraraghavan, S. K. (2017). Multi-Attribute Loss Aversion and Reference Dependence: Evidence from the Performing Arts Industry. Management Science, 64 (1), 421-436. http://dx.doi.org/10.1287/mnsc.2016.2605
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Date Posted: 15 June 2018
This document has been peer reviewed.