Your neighbor ' s first name is " Loss " and his last name is " Aversion " . Mr . Loss Aversion expresses his utility with the following function: u ( x ) = x .4 , ( x ^ 0.4) where x is a possible payoff. Mr . " Aversion " coefficient of loss aversion \ lambda is 2 . His reference point is $ 50 , his \ alpha ( coefficient of diminishing marginal sensitivity for gains )