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SUMMARY:Designing a Lottery for a Regret Averse Consumer - Chris Gee\, Fac
 ulty of Economics
DTSTART:20101126T130000Z
DTEND:20101126T143000Z
UID:TALK27780@talks.cam.ac.uk
CONTACT:Donna Harris
DESCRIPTION:This paper investigates how a lottery operator might profit fr
 om a consumer's regret aversion. We derive the conditions under which an e
 xpected profit maximising monopolist finds it optimal to supply a "realist
 ic"\nlottery game to a regret averse consumer and we interpret the results
  with a measure of regret aversion\, identifying the central relationship 
 between the consumer's regret aversion and intrinsic risk aversion in the 
 determination of the lottery contract. We parameterise regret aversion and
  we calculate\nthe optimal design for consumers with different degrees of 
 regret aversion. We show that expected profit is increasing with the consu
 mer's regret aversion.
LOCATION:Room LBR12\, The Law Faculty\, Sidgwick Site
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