Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/37536
Authors: 
Schmidt, Ulrich
Zank, Horst
Year of Publication: 
2010
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie - Session: Individual Decision Making Under Risk and Uncertainty F15-V3
Abstract: 
In previous models of (cumulative) prospect theory reference-dependence of preferences is imposed beforehand and the location of the reference point is exogenously determined. This paper provides an axiomatization of a new specification of cumulative prospect theory, termed endogenous prospect theory, where reference-dependence is derived from preference conditions and a unique reference point arises endogenously.
Subjects: 
prospect theory
reference point
diminishing sensitivity
loss aversion
JEL: 
D81
C91
D80
Document Type: 
Conference Paper

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