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Title:Reference points and effort provision PDF Logo
Authors:Abeler, Johannes
Falk, Armin
Götte, Lorenz
Huffman, David
Issue Date:2009
Series/Report no.:CeDEx discussion paper series 2009-02
Abstract:A key open question for theories of reference-dependent preferences is what determines the reference point. One candidate is expectations: what people expect could affect how they feel about what actually occurs. In a real-effort experiment, we manipulate the rational expectations of subjects and check whether this manipulation influences their effort provision. We find that effort provision is significantly different between treatments in the way predicted by models of expectation-based reference-dependent preferences: if expectations are high, subjects work longer and earn more money than if expectations are low.
Subjects:reference points
expectations
loss aversion
risk aversion
disappointment
experiment
JEL:C91
D01
D84
J22
Document Type:Working Paper
Appears in Collections:CeDEx Discussion Paper Series, The University of Nottingham

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