Reference Points and Effort Provision

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

No 3939, IZA Discussion Papers from Institute for the Study of Labor (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)
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-upt
Date: 2009-01
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Published in: American Economic Review, 2011, 101 (2), 470-492

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http://ftp.iza.org/dp3939.pdf (application/pdf)

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)
Working Paper: Reference Points and Effort Provision (2009)
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