Expectations As Endowments: Evidence on Reference-Dependent Preferences From Exchange and Valuation Experiments

Two experiments show loss aversion around expectations-based reference points. The exchange experiment randomizes the probability subjects can trade an item. Lower probabilities of permitted trade reduce the probability of choosing to trade. The valuation experiment randomly assigns a probability of obtaining an item: a high probability increases item valuation by 20-30%.



Citation:

Keith Ericson and Andreas Fuster (2011) ,"Expectations As Endowments: Evidence on Reference-Dependent Preferences From Exchange and Valuation Experiments", in NA - Advances in Consumer Research Volume 39, eds. Rohini Ahluwalia, Tanya L. Chartrand, and Rebecca K. Ratner, Duluth, MN : Association for Consumer Research, Pages: 142-143.

Authors

Keith Ericson , Harvard University, USA
Andreas Fuster , Harvard University, USA



Volume

NA - Advances in Consumer Research Volume 39 | 2011



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