Estimating the reference frame: A smooth twice-differentiable utility function for non-compensatory loss-averse decision-making
Author
Abstract
Suggested Citation
DOI: 10.1016/j.jocm.2018.03.002
Download full text from publisher
As the access to this document is restricted, you may want to search for a different version of it.
References listed on IDEAS
- Guevara, C. Angelo & Fukushi, Mitsuyoshi, 2016. "Modeling the decoy effect with context-RUM Models: Diagrammatic analysis and empirical evidence from route choice SP and mode choice RP case studies," Transportation Research Part B: Methodological, Elsevier, vol. 93(PA), pages 318-337.
- Botond Kőszegi & Matthew Rabin, 2006.
"A Model of Reference-Dependent Preferences,"
The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(4), pages 1133-1165.
- Botond Koszegi & Matthew Rabin, 2004. "A Model of Reference-Dependent Preferences," Method and Hist of Econ Thought 0407001, University Library of Munich, Germany.
- Koszegi, Botond & Rabin, Matthew, 2004. "A Model of Reference-Dependent Preferences," Department of Economics, Working Paper Series qt0w82b6nm, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Botond Koszegi & Matthew Rabin, 2005. "A Model of Reference-Dependent Preferences," Levine's Bibliography 784828000000000341, UCLA Department of Economics.
- Ulrich Schmidt & Horst Zank, 2008.
"Risk Aversion in Cumulative Prospect Theory,"
Management Science, INFORMS, vol. 54(1), pages 208-216, January.
- U Schmidt & H Zank, 2002. "Risk Aversion in Cumulative Prospect Theory," Economics Discussion Paper Series 0207, Economics, The University of Manchester.
- Schmidt, Ulrich & Horst Zank, 2002. "Risk Aversion in Cumulative Prospect Theory," Royal Economic Society Annual Conference 2002 162, Royal Economic Society.
- Francisco J. Bahamonde-Birke & Uwe Kunert & Heike Link & Juan de Dios Ortúzar, 2017.
"About attitudes and perceptions: finding the proper way to consider latent variables in discrete choice models,"
Transportation, Springer, vol. 44(3), pages 475-493, May.
- Francisco J. Bahamonde-Birke & Uwe Kunert & Heike Link & Juan de Dios Ortúzar, 2015. "About Attitudes and Perceptions: Finding the Proper Way to Consider Latent Variables in Discrete Choice Models," Discussion Papers of DIW Berlin 1474, DIW Berlin, German Institute for Economic Research.
- Richard H. Thaler & Amos Tversky & Daniel Kahneman & Alan Schwartz, 1997. "The Effect of Myopia and Loss Aversion on Risk Taking: An Experimental Test," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(2), pages 647-661.
- Shlomo Benartzi & Richard H. Thaler, 1995.
"Myopic Loss Aversion and the Equity Premium Puzzle,"
The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(1), pages 73-92.
- Shlomo Benartzi & Richard H. Thaler, 1993. "Myopic Loss Aversion and the Equity Premium Puzzle," NBER Working Papers 4369, National Bureau of Economic Research, Inc.
- Ernst Fehr & Lorenz Goette & Christian Zehnder, 2009.
"A Behavioral Account of the Labor Market: The Role of Fairness Concerns,"
Annual Review of Economics, Annual Reviews, vol. 1(1), pages 355-384, May.
- Ernst Fehr & Lorenz Goette & Christian Zehnder, 2008. "A behavioral account of the labor market: the role of fairness concerns," IEW - Working Papers 394, Institute for Empirical Research in Economics - University of Zurich.
- Fehr, Ernst & Götte, Lorenz & Zehnder, Christian, 2008. "A Behavioral Account of the Labor Market: The Role of Fairness Concerns," IZA Discussion Papers 3901, Institute of Labor Economics (IZA).
- Train,Kenneth E., 2009.
"Discrete Choice Methods with Simulation,"
Cambridge Books,
Cambridge University Press, number 9780521766555, January.
- Kenneth Train, 2003. "Discrete Choice Methods with Simulation," Online economics textbooks, SUNY-Oswego, Department of Economics, number emetr2.
- Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521747387, November.
- Heiko Karle & Georg Kirchsteiger & Martin Peitz, 2015.
"Loss Aversion and Consumption Choice: Theory and Experimental Evidence,"
American Economic Journal: Microeconomics, American Economic Association, vol. 7(2), pages 101-120, May.
- Kirchsteiger, Georg & Peitz, Martin & Karle, Heiko, 2012. "Loss Aversion and Consumption Choice: Theory and Experimental Evidence," CEPR Discussion Papers 9183, C.E.P.R. Discussion Papers.
- Karle, Heiko & Kirchsteiger, Georg & Peitz, Martin, 2013. "Loss Aversion and Consumption Choice: Theory and Experimental Evidence," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79943, Verein für Socialpolitik / German Economic Association.
- Daniel Kahneman & Amos Tversky, 2013.
"Prospect Theory: An Analysis of Decision Under Risk,"
World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127,
World Scientific Publishing Co. Pte. Ltd..
- Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-291, March.
- Amos Tversky & Daniel Kahneman, 1979. "Prospect Theory: An Analysis of Decision under Risk," Levine's Working Paper Archive 7656, David K. Levine.
- Brown, Paul M., 1995. "Learning from experience, reference points, and decision costs," Journal of Economic Behavior & Organization, Elsevier, vol. 27(3), pages 381-399, August.
- Tversky, Amos & Kahneman, Daniel, 1992. "Advances in Prospect Theory: Cumulative Representation of Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 297-323, October.
- David C. Kingsley & Thomas C. Brown, 2010. "Preference Uncertainty, Preference Learning, and Paired Comparison Experiments," Land Economics, University of Wisconsin Press, vol. 86(3).
- Botond Koszegi & Matthew Rabin, 2007.
"Reference-Dependent Risk Attitudes,"
American Economic Review, American Economic Association, vol. 97(4), pages 1047-1073, September.
- Botond Koszegi & Matthew Rabin, 2006. "Reference-Dependent Risk Attitudes," Levine's Bibliography 122247000000001267, UCLA Department of Economics.
- Dixit, Vinayak V. & Harb, Rami C. & Martínez-Correa, Jimmy & Rutström, Elisabet E., 2015. "Measuring risk aversion to guide transportation policy: Contexts, incentives, and respondents," Transportation Research Part A: Policy and Practice, Elsevier, vol. 80(C), pages 15-34.
- Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74(2), pages 132-132.
- Loomes, Graham & Sugden, Robert, 1982. "Regret Theory: An Alternative Theory of Rational Choice under Uncertainty," Economic Journal, Royal Economic Society, vol. 92(368), pages 805-824, December.
- Dunn, L F, 1996. "Loss Aversion and Adaptation in the Labor Market: Empirical Indifference Functions and Labor Supply," The Review of Economics and Statistics, MIT Press, vol. 78(3), pages 441-450, August.
- Frijns, Bart & Koellen, Esther & Lehnert, Thorsten, 2008. "On the determinants of portfolio choice," Journal of Economic Behavior & Organization, Elsevier, vol. 66(2), pages 373-386, May.
- Kobberling, Veronika & Wakker, Peter P., 2005. "An index of loss aversion," Journal of Economic Theory, Elsevier, vol. 122(1), pages 119-131, May.
- Huber, Joel & Payne, John W & Puto, Christopher, 1982. "Adding Asymmetrically Dominated Alternatives: Violations of Regularity and the Similarity Hypothesis," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 9(1), pages 90-98, June.
- John A. Rizzo & Richard J. Zeckhauser, 2003. "Reference Incomes, Loss Aversion, and Physician Behavior," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 909-922, November.
- Bruce G. S. Hardie & Eric J. Johnson & Peter S. Fader, 1993. "Modeling Loss Aversion and Reference Dependence Effects on Brand Choice," Marketing Science, INFORMS, vol. 12(4), pages 378-394.
- Train, Kenneth & Wilson, Wesley W., 2008. "Estimation on stated-preference experiments constructed from revealed-preference choices," Transportation Research Part B: Methodological, Elsevier, vol. 42(3), pages 191-203, March.
- De Borger, Bruno & Fosgerau, Mogens, 2008. "The trade-off between money and travel time: A test of the theory of reference-dependent preferences," Journal of Urban Economics, Elsevier, vol. 64(1), pages 101-115, July.
- Nicholas C. Barberis, 2012. "Thirty Years of Prospect Theory in Economics: A Review and Assessment," NBER Working Papers 18621, National Bureau of Economic Research, Inc.
- Thiemann, Kathrin, 2017. "Ability tracking or comprehensive schooling? A theory on peer effects in competitive and non-competitive cultures," Journal of Economic Behavior & Organization, Elsevier, vol. 137(C), pages 214-231.
Most related items
These are the items that most often cite the same works as this one and are cited by the same works as this one.- Enrico G. De Giorgi & Thierry Post, 2011.
"Loss Aversion with a State-Dependent Reference Point,"
Management Science, INFORMS, vol. 57(6), pages 1094-1110, June.
- Enrico G. De Giorgi & Thierry Post, 2010. "Loss aversion with a state-dependent reference point," University of St. Gallen Department of Economics working paper series 2010 2010-23, Department of Economics, University of St. Gallen.
- W. Wong & R. Chan, 2008.
"Prospect and Markowitz stochastic dominance,"
Annals of Finance, Springer, vol. 4(1), pages 105-129, January.
- Wing-Keung Wong & Raymond H. Chan, 2005. "Prospect and Markowitz Stochastic Dominance," Monash Economics Working Papers 08/05, Monash University, Department of Economics.
- Matthew Gould & Matthew D. Rablen, 2019.
"Are World Leaders Loss Averse?,"
CESifo Working Paper Series
7763, CESifo.
- Matthew Gould & Matthew D. Rablen, 2024. "Are World Leaders Loss Averse?," Working Papers 2024011, The University of Sheffield, Department of Economics.
- Aurélien Baillon & Han Bleichrodt & Vitalie Spinu, 2020.
"Searching for the Reference Point,"
Management Science, INFORMS, vol. 66(1), pages 93-112, January.
- Aurélien Baillon & Han Bleichrodt & Vitalie Spinu, 2020. "Searching for the reference point," Post-Print hal-04325608, HAL.
- Daniel Gottlieb & Olivia S. Mitchell, 2020.
"Narrow Framing and Long‐Term Care Insurance,"
Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 87(4), pages 861-893, December.
- Daniel Gottlieb & Olivia S. Mitchell, 2015. "Narrow Framing and Long-Term Care Insurance," NBER Working Papers 21048, National Bureau of Economic Research, Inc.
- Daniel Gottlieb & Olivia S. Mitchell, 2015. "Narrow Framing and Long-Term Care Insurance," Working Papers wp321, University of Michigan, Michigan Retirement Research Center.
- Stephane Hess & Andrew Daly & Richard Batley, 2018. "Revisiting consistency with random utility maximisation: theory and implications for practical work," Theory and Decision, Springer, vol. 84(2), pages 181-204, March.
- Charles-Cadogan, G., 2018. "Losses loom larger than gains and reference dependent preferences in Bernoulli’s utility function," Journal of Economic Behavior & Organization, Elsevier, vol. 154(C), pages 220-237.
- Pedro Bordalo & Nicola Gennaioli & Andrei Shleifer, 2013.
"Salience and Consumer Choice,"
Journal of Political Economy, University of Chicago Press, vol. 121(5), pages 803-843.
- Pedro Bordalo & Nicola Gennaioli & Andrei Shleifer, "undated". "Salience and Consumer Choice," Working Paper 62321, Harvard University OpenScholar.
- Pedro Bordalo & Nicola Gennaioli & Andrei Shleifer, 2012. "Salience and Consumer Choice," NBER Working Papers 17947, National Bureau of Economic Research, Inc.
- Bordalo, Pedro & Gennaioli, Nicola & Shleifer, Andrei, 2013. "Salience and Consumer Choice," Scholarly Articles 27814563, Harvard University Department of Economics.
- Pedro Bordalo & Nicola Gennaioli & Andrei Shleifer, 2012. "Salience and Consumer Choice," Working Papers 463, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Pedro Bordado & Nicola Gennaioli & Andrei Shleifer, 2012. "Salience and Consumer Choice," Working Papers 501, Barcelona School of Economics.
- Pedro Bordalo & Nicola Gennaioli & Andrei Shleifer, 2010. "Salience and consumer choice," Economics Working Papers 1252, Department of Economics and Business, Universitat Pompeu Fabra, revised May 2012.
- Ulrich Schmidt & Horst Zank, 2012.
"A genuine foundation for prospect theory,"
Journal of Risk and Uncertainty, Springer, vol. 45(2), pages 97-113, October.
- Ulrich Schmidt & Horst Zank, 2011. "A Genuine Foundation for Prospect Theory," Economics Discussion Paper Series 1114, Economics, The University of Manchester.
- Alexander L. Brown & Taisuke Imai & Ferdinand M. Vieider & Colin F. Camerer, 2024.
"Meta-analysis of Empirical Estimates of Loss Aversion,"
Journal of Economic Literature, American Economic Association, vol. 62(2), pages 485-516, June.
- Brown, Alexander L. & Imai, Taisuke & Vieider, Ferdinand & Camerer, Colin, 2020. "Meta-Analysis of Empirical Estimates of Loss-Aversion," MetaArXiv hnefr, Center for Open Science.
- Brown, Alexander L. & Imai, Taisuke & Vieider, Ferdinand M. & Camerer, Colin F., 2021. "Meta-Analysis of Empirical Estimates of Loss-Aversion," Rationality and Competition Discussion Paper Series 275, CRC TRR 190 Rationality and Competition.
- Alexander, L. Brown & Taisuke Imai & Ferdinand M. Vieider & Colin Camerer, 2021. "Meta-Analysis of Empirical Estimates of Loss-Aversion," CESifo Working Paper Series 8848, CESifo.
- Andersen, Steffen & Harrison, Glenn W. & Lau, Morten Igel & Rutström, Elisabet E., 2010.
"Behavioral econometrics for psychologists,"
Journal of Economic Psychology, Elsevier, vol. 31(4), pages 553-576, August.
- Steffen Andersen & Glenn W. Harrison & Morten Igel Lau & Elisabet E. Rutstroem, 2007. "Behavioral Econometrics for Psychologists," Department of Economics Working Papers 2007_08, Durham University, Department of Economics.
- Andersen, Steffen & Harrison, Glenn W. & Lau, Morten Igel & Rutström, Elisabet E., 2009. "Behavioral Econometrics for Psychologists," Working Papers 04-2009, Copenhagen Business School, Department of Economics.
- Andersen, Steffen & Harrison, Glenn W. & Lau, Morten Igel & Rutström, Elisabeth E., 2007. "Behavioral Econometrics for Psychologists," Working Papers 18-2007, Copenhagen Business School, Department of Economics.
- Simon Gächter & Eric J. Johnson & Andreas Herrmann, 2022.
"Individual-level loss aversion in riskless and risky choices,"
Theory and Decision, Springer, vol. 92(3), pages 599-624, April.
- Gächter, Simon & Johnson, Eric J. & Herrmann, Andreas, 2007. "Individual-Level Loss Aversion in Riskless and Risky Choices," IZA Discussion Papers 2961, Institute of Labor Economics (IZA).
- Simon Gaechter & Eric J. Johnson & Andreas Herrmann, 2010. "Individual-level loss aversion in riskless and risky choices," Discussion Papers 2010-20, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
- Simon Gaechter & Eric Johnson & Andreas Herrmann, 2007. "Individual-Level Loss Aversion In Riskless And Risky Choices," Discussion Papers 2007-02, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
- Mohammed Abdellaoui & Han Bleichrodt & Corina Paraschiv, 2007.
"Loss Aversion Under Prospect Theory: A Parameter-Free Measurement,"
Management Science, INFORMS, vol. 53(10), pages 1659-1674, October.
- H. Bleichrodt & C. Paraschiv & Mohammed Abdellaoui, 2007. "Loss Aversion Under Prospect Theory: A Parameter-Free Measurement," Post-Print hal-00457047, HAL.
- Charles-Cadogan, G., 2016. "Expected utility theory and inner and outer measures of loss aversion," Journal of Mathematical Economics, Elsevier, vol. 63(C), pages 10-20.
- Park, Hyeon, 2023. "A general equilibrium model of dynamic loss aversion," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 107(C).
- Per Engström & Katarina Nordblom & Henry Ohlsson & Annika Persson, 2015.
"Tax Compliance and Loss Aversion,"
American Economic Journal: Economic Policy, American Economic Association, vol. 7(4), pages 132-164, November.
- Engström, Per & Nordblom, Katarina & Ohlsson, Henry & Persson, Annika, 2011. "Loss evasion and tax aversion," Working Paper Series 2011:17, Uppsala University, Department of Economics.
- Engström, Per & Nordblom, Katarina & Ohlsson, Henry & Persson, Annika, 2011. "Loss evasion and tax aversion," Working Papers in Economics 518, University of Gothenburg, Department of Economics.
- Engström, Per & Nordblom, Katarina & Ohlsson, Henry & Persson, Annika, 2011. "Loss evasion and tax aversion," Working Paper Series, Center for Fiscal Studies 2011:11, Uppsala University, Department of Economics.
- Zhihua Li & Songfa Zhong, 2023.
"Reference Dependence in Intertemporal Preference,"
Management Science, INFORMS, vol. 69(1), pages 475-490, January.
- Zhihua Li & Songfa Zhong, 2020. "Reference Dependence in Intertemporal Preference," Discussion Papers 20-01, Department of Economics, University of Birmingham.
- Alex Markle & George Wu & Rebecca White & Aaron Sackett, 2018. "Goals as reference points in marathon running: A novel test of reference dependence," Journal of Risk and Uncertainty, Springer, vol. 56(1), pages 19-50, February.
- Ferdinand M. Vieider & Peter Martinsson & Pham Khanh Nam & Nghi Truong, 2019. "Risk preferences and development revisited," Theory and Decision, Springer, vol. 86(1), pages 1-21, February.
- Santoro, Emiliano & Petrella, Ivan & Pfajfar, Damjan & Gaffeo, Edoardo, 2014.
"Loss aversion and the asymmetric transmission of monetary policy,"
Journal of Monetary Economics, Elsevier, vol. 68(C), pages 19-36.
- Edoardo Gaffeo & Ivan Petrella & Damjan Pfajfar & Emiliano Santoro, 2012. "Loss Aversion and the Asymmetric Transmission of Monetary Policy," Discussion Papers 12-21, University of Copenhagen. Department of Economics.
- Petrella, Ivan & Pfajfar, Damjan & Santoro, Emiliano & Gaffeo, Edoardo, 2014. "Loss Aversion and the Asymmetric Transmission of Monetary Policy," CEPR Discussion Papers 10105, C.E.P.R. Discussion Papers.
More about this item
Keywords
Loss-aversion; Utility function; Discrete choice modeling; Non-compensatory models;All these keywords.
Statistics
Access and download statisticsCorrections
All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eejocm:v:28:y:2018:i:c:p:71-81. See general information about how to correct material in RePEc.
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/journal-of-choice-modelling .
Please note that corrections may take a couple of weeks to filter through the various RePEc services.