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dc.contributor.authorMatthey, Astriden_US
dc.contributor.authorDwenger, Nadjaen_US
dc.date.accessioned2008-03-07en_US
dc.date.accessioned2009-07-27T09:40:00Z-
dc.date.available2009-07-27T09:40:00Z-
dc.date.issued2007en_US
dc.identifier.urihttp://hdl.handle.net/10419/25673-
dc.description.abstractThe higher our aspirations, the higher the probability that we have to adjust them downwards when forming more realistic expectations later on. This paper shows that the costs induced by high aspirations are not trivial. We first develop a theoretical framework to identify the factors that determine the effect of aspirations on expected utility. Then we present evidence from a lab experiment on the factor found to be crucial: the adjustment of reference states to changes in expectations. The results suggest that the costs of high aspirations can be significant, since reference states do not adjust quickly. We use a novel, indirect approach that allows us to infer the determinants of the reference state from observed behavior, rather than to rely on cheap talk.en_US
dc.language.isoengen_US
dc.publisherUniversität Jena und Max-Planck-Institut für Ökonomik Jenaen_US
dc.relation.ispartofseriesJena economic research papers 2007,097en_US
dc.subject.jelD11en_US
dc.subject.jelD84en_US
dc.subject.jelC91en_US
dc.subject.keywordaspirationsen_US
dc.subject.keywordreference stateen_US
dc.subject.keywordexpectationsen_US
dc.subject.keywordindividual utilityen_US
dc.subject.keywordexperimentsen_US
dc.subject.stwErwartungstheorieen_US
dc.subject.stwAnpassungen_US
dc.subject.stwTesten_US
dc.titleDon't aim too high: the potential costs of high aspirationsen_US
dc.typeWorking Paperen_US
dc.identifier.ppn55954815Xen_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:Publikationen von Forscherinnen und Forschern des DIW
Jena Economic Research Papers, MPI für Ökonomik

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