A Model of Reference-Dependent Preferences
نویسندگان
چکیده
منابع مشابه
A Model of Reference-Dependent Preferences
We develop a model that fleshes out, extends, and modifies existing models of referencedependent preferences and loss aversion, with the goal of making the theory more broadly applicable. Our model 1) allows for stochastic reference points; 2) accommodates a realistic form of flexibility in the “psychological dimensions” relevant for evaluating gains and losses; 3) combines the reference-depend...
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We develop a model of reference-dependent preferences and loss aversion where “gain–loss utility” is derived from standard “consumption utility” and the reference point is determined endogenously by the economic environment. We assume that a person’s reference point is her rational expectations held in the recent past about outcomes, which are determined in a personal equilibrium by the require...
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We develop a dynamic model of reference-dependent preferences in which each period’s utility depends not only on that period’s consumption, but also on recent changes in beliefs about consumption: a person derives contemporaneous gain-loss utility from the comparison of this period’s outcome to previous beliefs, and prospective gain-loss utility from a change in her beliefs about future outcome...
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We posit that parties assess bargaining outcomes not in absolute terms but in relative terms vis a vis reference points and we assume that reference points are a ected by prior o ers. In a simple bargaining model, we illustrate how such evolving preferences may be responsible for gradualism and delay in bargaining. We observe that the resulting ine ciency may not vanish even in the limit as the...
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ژورنال
عنوان ژورنال: The Quarterly Journal of Economics
سال: 2006
ISSN: 0033-5533,1531-4650
DOI: 10.1093/qje/121.4.1133