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http://hdl.handle.net/10419/25689
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| Title: | | Yesterday's expectation of tomorrow determines what you do today: the role of reference-dependent utility from expectations  |
| Authors: | | Matthey, Astrid |
| Issue Date: | | 2008 |
| Series/Report no.: | | Jena economic research papers 2008,003 |
| Abstract: | | The paper introduces the concept of adjustment utility, that is, referencedependent utility from expectations. It offers an explanation for observed preferences that cannot be explained with existing models, and yields new predictions for individual decision making. The model gives a simple explanation for, e.g., why people are reluctant to change their plans even when these turn out to be unexpectedly costly; peoples aversion towards positive but false information, which cannot be explained with previous models; and the increasing acceptance of risks when people get used to them. |
| Subjects: | | utility expectations reference-dependent preferences anticipation prospect theory experiments |
| JEL: | | D11 D81 D84 C99 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Jena Economic Research Papers, MPI für Ökonomik
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