IDEAS home Printed from https://ideas.repec.org/a/wly/mgtdec/v46y2025i2p1108-1124.html
   My bibliography  Save this article

The Effect of Disappointment Aversion on Risk Prevention

Author

Listed:
  • Yongjin Yin
  • Shengwang Meng

Abstract

We adopt three of well‐established models of disappointment aversion to study the effect of disappointment aversion on risk prevention which involves self‐insurance and self‐protection. In self‐insurance actions, we show that, in general, the disappointment‐averse decision maker will exert more effort than the standard risk‐averse decision maker, and the optimal efforts across these disappointment models are not identical. Moreover, under the Gul model, the disappointment‐averse decision maker may exert less effort than the standard risk‐averse decision maker in multiple loss states. In self‐protection actions, we provide a set of sufficient conditions under which the disappointment‐averse decision maker will exert more effort or less effort compared with the standard risk‐averse decision maker for each of these disappointment aversion models.

Suggested Citation

  • Yongjin Yin & Shengwang Meng, 2025. "The Effect of Disappointment Aversion on Risk Prevention," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 46(2), pages 1108-1124, March.
    • Handle: RePEc:wly:mgtdec:v:46:y:2025:i:2:p:1108-1124
    DOI: 10.1002/mde.4423
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/mde.4423
    Download Restriction: no
    File URL: https://libkey.io/10.1002/mde.4423?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:mgtdec:v:46:y:2025:i:2:p:1108-1124. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/7976 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.