Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/35705 
Year of Publication: 
2009
Series/Report no.: 
IZA Discussion Papers No. 3939
Publisher: 
Institute for the Study of Labor (IZA), Bonn
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
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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