Economics, Econometrics and Finance
4 years ago

Regret-averse firms outperform risk-averse counterparts in production decisions.

1 view
RePEc: Research Papers in Economics
Regret Aversion, Regret Neutrality, and Risk Aversion in Production
Xu Guo, Wing‐Keung Wong

Paper Summary

The article explores how different attitudes towards regret affect production decisions. Regret-neutral firms produce more than purely risk-averse firms but less than firms under certainty. Regret-averse firms produce more than both risk-averse and regret-neutral firms. This information can help production managers make better decisions.

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