Effect on Decision and Stimulation of Consumer and Estate Enterprise by Loss Aversion

Considering that consumer and estate enterprise are both suffered from loss aversion psychology, based on prospect theory, this paper constructs the utility models of consumer and estate enterprise, in the non-buyback contract and buyback contract situations, and analyses the effects on decision-making, performance of estate enterprise, market demand by loss aversion. Conclusions are drawn as following. Consumer's loss aversion psychology is unfavorable to improve the estate enterprise's performance, but favorable to expand the market demand, so that estate enterprise will reduce prices and improve sales area; buyback contract can improve consumer's utility, so that the stronger consumer's loss aversion psychology is, the more significant the role of expanding market demand by buyback contract is. But, only when the buyback price is greater than a certain value, it can promote estate enterprise's performance, so as to realize the common incentive for estate enterprise and consumer. These conclusions have reference values for decision-making of estate industry.