Loss Aversion in Riskless Choice: A Reference-Dependent Model

@article{citeulike:278458, abstract = {Much experimental evidence indicates that choice depends on the status quo or reference level: changes of reference point often lead to reversals of preference. We present a reference-dependent theory of consumer choice, which explains such effects by a deformation of indifference curves about the reference point. The central assumption of the theory is that losses and disadvantages have greater impact on preferences than gains and advantages. Implications of loss aversion for economic behavior are considered.}, author = {Tversky, Amos and Kahneman, Daniel }, citeulike-article-id = {278458}, journal = {The Quarterly Journal of Economics}, keywords = {decision-making, economics, framing\_effect, loss\_aversion}, number = {4}, pages = {1039--1061}, posted-at = {2007-06-07 16:14:05}, priority = {2}, title = {Loss Aversion in Riskless Choice: A Reference-Dependent Model}, url = {http://www.jstor.org/stable/2937956}, volume = {106}, year = {1991} }

TY - JOUR ID - citeulike:278458 L3 - citeulike-article-id:278458 TI - Loss Aversion in Riskless Choice: A Reference-Dependent Model JF - The Quarterly Journal of Economics VL - 106 IS - 4 SP - 1039 EP - 1061 N2 - Much experimental evidence indicates that choice depends on the status quo or reference level: changes of reference point often lead to reversals of preference. We present a reference-dependent theory of consumer choice, which explains such effects by a deformation of indifference curves about the reference point. The central assumption of the theory is that losses and disadvantages have greater impact on preferences than gains and advantages. Implications of loss aversion for economic behavior are considered. KW - decision-making KW - economics KW - framing_effect KW - loss_aversion AU - Tversky, Amos AU - Kahneman, Daniel PY - 1991/// UR - http://www.jstor.org/stable/2937956 ER -