Prospect Theory and consumer behavior: Goals and Tradeoffs

Florent Buisson

Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne

Abstract: I show that a loss averse consumer who must share her budget between two goods prefer allocations for which consumption equals reference point for at least one good. The phenomenon intensity depends on the curvature of the utility curve. These results are consistent with several stylized facts which cannot be explained by the standard consumer theory

Keywords: Loss aversion; prospect theory (search for similar items in EconPapers)
JEL-codes: D03 D11 D83 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2013-03
New Economics Papers: this item is included in nep-cbe, nep-cwa, nep-mic and nep-upt
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ftp://mse.univ-paris1.fr/pub/mse/CES2013/13030.pdf (application/pdf)

Related works:
Working Paper: Prospect Theory and consumer behavior: Goals and Tradeoffs (2013)
Working Paper: Prospect Theory and consumer behavior: Goals and Tradeoffs (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:mse:cesdoc:13030

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