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Heterogeneity of Loss Aversion and Expectations-Based Reference Points

Goette, Lorenz and Graeber, Thomas and Kellogg, Alexandre and Sprenger, Charles (2018) Heterogeneity of Loss Aversion and Expectations-Based Reference Points. . (Unpublished) https://resolver.caltech.edu/CaltechAUTHORS:20200722-084620971

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Abstract

This project examines the role of heterogeneity in loss aversion for identifying models of expectations-based reference dependence (Kőszegi and Rabin, 2006, 2007) (KR). Different levels of loss aversion lead to different signs for comparative statics previously used to test the KR model. In an experiment with 607 subjects, we show heterogeneous treatment effects over loss aversion types. Recognizing heterogeneity in loss aversion allows us to reliably recover the KR model’s central element of expectations-based reference points. Additional effects are discussed related to the subjective perception of exchange experiences.


Item Type:Report or Paper (Working Paper)
Related URLs:
URLURL TypeDescription
https://doi.org/10.2139/ssrn.3170670DOIArticle
Additional Information:Date Written: April 27, 2018; Posted: 12 May 2018.
Subject Keywords:Reference-Dependent Preferences, Rational Expectations, Personal Equilibrium, Endowment Effect, Expectations-Based Reference Points
Classification Code:JEL: D81, D84, D12, D03
Record Number:CaltechAUTHORS:20200722-084620971
Persistent URL:https://resolver.caltech.edu/CaltechAUTHORS:20200722-084620971
Official Citation:Goette, Lorenz and Graeber, Thomas and Kellogg, Alexandre and Sprenger, Charles, Heterogeneity of Loss Aversion and Expectations-Based Reference Points (April 27, 2018). http://dx.doi.org/10.2139/ssrn.3170670
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:104499
Collection:CaltechAUTHORS
Deposited By: Tony Diaz
Deposited On:22 Jul 2020 15:57
Last Modified:22 Jul 2020 15:57

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