The DOI matches its Crossref record; 9 of the 9 references it cites were found in a registry or an index.
Reference-Dependent Risk Attitudes
Abstract
We use Kőszegi and Rabin's (2006) model of reference-dependent utility, and an extension of it that applies to decisions with delayed consequences, to study preferences over monetary risk. Because our theory equates the reference point with recent probabilistic beliefs about outcomes, it predicts specific ways in which the environment influences attitudes toward modest-scale risk. It replicates “classical” prospect theory—including the prediction of distaste for insuring losses—when exposure to risk is a surprise, but implies first-order risk aversion when a risk, and the possibility of insuring it, are anticipated. A prior expectation to take on risk decreases aversion to both the anticipated and additional risk. For large-scale risk, the model allows for standard “consumption utility” to dominate reference-dependent “gain-loss utility,” generating nearly identical risk aversion across situations. (JEL D81)
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Cites
Prospect Theory: An Analysis of Decision under Risk
Kahneman, D., & Tversky, A. (1979) · Econometrica · doi:10.2307/1914185 · Cited by 48,524
Kahneman, D., & Tversky, A. (1984) · American Psychologist · doi:10.1037/0003-066x.39.4.341 · Cited by 6,544
Maps of Bounded Rationality: Psychology for Behavioral Economics
Kahneman, D. (2003) · American Economic Review · doi:10.1257/000282803322655392 · Cited by 5,377
A Model of Reference-Dependent Preferences
Koszegi, B., & Rabin, M. (2006) · The Quarterly Journal of Economics · doi:10.1093/qje/121.4.1133 · Cited by 2,728
Self-citationBarsky, R. B., Juster, F. T., Kimball, M. S., & Shapiro, M. D. (1997) · The Quarterly Journal of Economics · doi:10.1162/003355397555280 · Cited by 2,400
Timid choices and bold forecasts: a cognitive perspective on risk taking.
Kahneman, D., & Lovallo, D. (1993) · Management Science · doi:10.1287/mnsc.39.1.17 · Cited by 2,043
Loss Aversion and Seller Behavior: Evidence from the Housing Market
Genesove, D., & Mayer, C. (2001) · The Quarterly Journal of Economics · doi:10.1162/003355301753265561 · Cited by 1,628
Functional imaging of neural responses to expectancy and experience of monetary gains and losses
Breiter, H. C., Aharon, I., Kahneman, D., Dale, A., & Shizgal, P. (2001) · Neuron · doi:10.1016/s0896-6273(01)00303-8 · Cited by 1,404
Mellers, B., Schwartz, A., & Ritov, I. (1999) · Journal of Experimental Psychology: General · doi:10.1037/0096-3445.128.3.332 · Cited by 839
Cited by
Salience Theory of Choice Under Risk
Bordalo, P., Gennaioli, N., & Shleifer, A. (2012) · The Quarterly Journal of Economics · doi:10.1093/qje/qjs018 · Cited by 1,287
Reference Points and Effort Provision
Abeler, J., Falk, A., Goette, L., & Huffman, D. (2011) · American Economic Review · doi:10.1257/aer.101.2.470 · Cited by 831
Individual Preferences, Monetary Gambles, and Stock Market Participation: A Case for Narrow Framing
Barberis, N., Huang, M., & Thaler, R. (2006) · The American Economic Review · doi:10.1257/000282806779468652 · Cited by 600
Reference-Dependent Consumption Plans
Kőszegi, B., & Rabin, M. (2009) · American Economic Review · doi:10.1257/aer.99.3.909 · Cited by 586
Self-citationCrawford, V. P., & Meng, J. (2011) · American Economic Review · doi:10.1257/aer.101.5.1912 · Cited by 517
Metadata
- Authors
- Kőszegi, B., & Rabin, M.
- Venue
- American Economic Review
- Publisher
- American Economic Association
- Published
- 2007-08-01
- Volume
- 97
- Issue
- 4
- Pages
- 1047-1073
- ISSN
- 0002-8282 (ISSN-L)
- OpenAlex
- W2062389098
- Cited by
- 1,024
- References
- 9
- FWCI
- 16.10
- Type
- journal article
- Language
- en
- Open access
- closed
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Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
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