A Functional Model for the Integration of Gains and Losses under Risk: Implications for the Measurement of Subjective Value

In order to be treated quantitatively, subjective gains and losses (utilities/disutilities) must be psychologically measured. If legitimate comparisons are sought between them, measurement must be at least interval level, with a common unit. If comparisons of absolute magnitudes across gains and losses are further sought, as in standard definitions of loss aversion, a common known zero must be added to the common unit requirement. These measurement issues are typically glossed [...]

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