Aspirations as reference points: an experimental investigation of risk behavior over time

Arvid Hoffmann, Sam Henry and Nikos Kalogeras

Theory and Decision, 2013, vol. 75, issue 2, 193-210

Abstract: This paper examines the importance of aspirations as reference points in a multi-period decision-making context. After stating their personal aspiration level, 172 individuals made six sequential decisions among risky prospects as part of a choice experiment. The results show that individuals make different risky-choices in a multi-period compared to a single-period setting. In particular, individuals’ aspiration level is their main reference point during the early stages of decision-making, while their starting status (wealth level at the start of the experiment) becomes the central reference point during the later stages of their multi-period decision-making. Copyright The Author(s) 2013

Keywords: Aspirations; Multi-period decision-making; Reference points; Risk-behavior; Risky-choice (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (18)

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Persistent link: https://EconPapers.repec.org/RePEc:kap:theord:v:75:y:2013:i:2:p:193-210

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DOI: 10.1007/s11238-012-9323-6

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