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What Potential Risks Do Employers Run When They Choose to Offer

question 96

Essay

What potential risks do employers run when they choose to offer a flexible benefits (cafeteria-style)plan?


Definitions:

Ultimatum Games

A type of game in experimental economics where two players interact to decide how to divide a sum of money; one proposes the split, and the other accepts or rejects it.

Endowment Effect

A psychological phenomenon in which people assign higher value to things merely because they own them.

Loss Aversion

In prospect theory, the property of most people’s preferences that the pain generated by losses feels substantially more intense than the pleasure generated by gains.

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