An endowment effect for risk: : Experimental tests of stochastic reference points

• Autores: Charles Sprenger
• Localización: Journal of Political Economy, ISSN-e 1537-534X, Vol. 123, Nº. 6, 2015
• Idioma: inglés
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• Resumen

  • Recent models of reference-dependent preferences indicate that expectations may play a prominent role in the presence of behavioral anomalies. A subset of such expectations-based models predicts an “endowment effect for risk”: that risk attitudes differ when reference points change from certain to stochastic. In two purposefully simple risk preference experiments, eliminating often-discussed confounds, I demonstrate both between and within subjects such an endowment effect for risk. These results provide needed separation between expectations-based reference-dependent models, allow for evaluation of recent theoretical extensions, and may help to close a long-standing debate in decision science on inconsistency between utility elicitation methodologies.