dualLossAversionFun: Takes a gain-loss matrix and outputs a value matrix

In avilesd/productConfig: Tools to analyze behavioral patterns from Product Configurators

Description

This function is called by smallerThanZero for its third step. It runs the 'loss-aversion' function over the values of the gain-loss matrix, and a consumption utility function over the values of the second parameter, as shown in [1]. Both input matrices must have the same dimensions. Altogether it returns a value matrix.

Usage

dualLossAversionFun(gainLossMatrix, decMatrix, lambda = 2.25, delta = 0.8)

Arguments

gainLossMatrix	a gain-loss matrix, such as the output from dualGainLossFunction. Format: attr are the columns and rounds as rows. (Numerical)
decMatrix	the decision matrix.
lambda	numeric - parameter of loss aversion for the value function as given by reference[1]. Default value is 2.25 as given by [2].
delta	numeric - expresses the relative importance of the aspiration level to other factors. Default is 0.8 and it should satisfy 0 < delta <1.

Value

a value matrix with equal dimensions as gainLossMatrix

References

[1] Golman, R., & Loewenstein, G. (2011). Explaining Nonconvex Preferences with Aspirational and Status Quo Reference Dependence. Mimeo, Carnegie Mellon University.

[2] Tversky, A., & Kahneman, D. (1992). Advances in prospect theory: Cumulative representation of uncertainty. Journal of Risk and uncertainty, 5(4), 297-323.

Examples

#Runnable
dualLossAversionFun(matrix(16:31, 4, 4), matrix(51:36, 4, 4))
dualLossAversionFun(matrix(16:31, 4, 4), matrix(1:16, 4, 4), lambda = 5, delta = 0.7)
dualLossAversionFun(matrix(1:100, 5, 20, byrow= T), matrix(150:51, 5, 20),delta = 0.3)

#Not runnable yet
dualGainLossFunction(aGainLossMatrix, itsDecisionMatrix)

avilesd/productConfig documentation built on May 11, 2019, 4:08 p.m.