Economics at your fingertips  

Estimating the reference frame: A smooth twice-differentiable utility function for non-compensatory loss-averse decision-making

Francisco J. Bahamonde-Birke

Journal of choice modelling, 2018, vol. 28, issue C, 71-81

Abstract: Since the introduction of prospect theory, reference-dependence and loss-aversion have become widely acknowledged as important elements affecting decision-making. Nevertheless, establishing and determining reference frames are not extensively analyzed in the literature; rather, in most applications, it is simply assumed that the reference frames can be represented through the status quo. This assumption, however, may lead to biased results, as not only the status quo affects reference frames, but also previous experiences or expectations, among many others.

Keywords: Loss-aversion; Utility function; Discrete choice modeling; Non-compensatory models (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

Journal of choice modelling is currently edited by S. Hess and J.M. Rose

More articles in Journal of choice modelling from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

Page updated 2018-11-10
Handle: RePEc:eee:eejocm:v:28:y:2018:i:c:p:71-81