Reference Points and Effort Provision

Johannes Abeler, Armin Falk, Lorenz Götte () and David Huffman
Additional contact information
Lorenz Götte: National University of Singapore
Authors registered in the RePEc Author Service: Lorenz Goette

No 3939, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: A key open question for theories of reference-dependent preferences is what determines the reference point. One candidate is expectations: what people expect could affect how they feel about what actually occurs. In a real-effort experiment, we manipulate the rational expectations of subjects and check whether this manipulation influences their effort provision. We find that effort provision is significantly different between treatments in the way predicted by models of expectation-based reference-dependent preferences: if expectations are high, subjects work longer and earn more money than if expectations are low.

Keywords: reference points; expectations; loss aversion; risk aversion; disappointment; experiment (search for similar items in EconPapers)
JEL-codes: C91 D01 D84 J22 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2009-01
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (40)

Published - published in: American Economic Review, 2011, 101 (2), 470-492

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Related works:
Journal Article: Reference Points and Effort Provision (2011)
Working Paper: Reference Points and Effort Provision (2011)
Working Paper: Reference Points and Effort Provision (2009)
Working Paper: Reference Points and Effort Provision (2009)
Working Paper: Reference Points and Effort Provision (2009)
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