Lagged beliefs and reference-dependent utility

Alec Smith

Journal of Economic Behavior & Organization, 2019, vol. 167, issue C, 331-340

Abstract: Models of expectation-based reference-dependent preferences proposes that the reference point to which consumption outcomes are compared is endogenously determined as a function of lagged, probabilistic beliefs. This paper presents an experiment designed to test some predictions of expectation-based reference dependence models. The design induces a stochastic reference point via a lottery and then measures valuations for a commodity. The experimental results find no effect of the first stage lottery on commodity valuation.

Keywords: Expectations; Beliefs; Reference-dependent preferences; Endowment effect; Prospect theory; Experiment (search for similar items in EconPapers)
JEL-codes: D11 D12 D84 D91 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:167:y:2019:i:c:p:331-340

DOI: 10.1016/j.jebo.2018.10.004

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