Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/25673 
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dc.contributor.authorMatthey, Astriden
dc.contributor.authorDwenger, Nadjaen
dc.date.accessioned2008-03-07-
dc.date.accessioned2009-07-27T09:40:00Z-
dc.date.available2009-07-27T09:40:00Z-
dc.date.issued2007-
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
dc.language.isoengen
dc.publisher|aFriedrich Schiller University Jena and Max Planck Institute of Economics |cJenaen
dc.relation.ispartofseries|aJena Economic Research Papers |x2007,097en
dc.subject.jelD11en
dc.subject.jelD84en
dc.subject.jelC91en
dc.subject.ddc330en
dc.subject.keywordaspirationsen
dc.subject.keywordreference stateen
dc.subject.keywordexpectationsen
dc.subject.keywordindividual utilityen
dc.subject.keywordexperimentsen
dc.subject.stwErwartungstheorieen
dc.subject.stwAnpassungen
dc.subject.stwTesten
dc.titleDon't aim too high: the potential costs of high aspirations-
dc.typeWorking Paperen
dc.identifier.ppn55954815Xen
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen

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