Aspirations as reference points: An experimental investigation of risk behavior over time

A.O.I. Hoffmann, S.F. Henry, N. Kalogeras

Research output: Contribution to journalArticleAcademicpeer-review

7 Citations (Scopus)

Abstract

This paper examines the importance of aspirations as reference points in a multi-period decision-making context. After stating their personal aspiration level, 172 individuals made six sequential decisions among risky prospects as part of a choice experiment. The results show that individuals make different risky-choices in a multi-period compared to a single-period setting. In particular, individuals’ aspiration level is their main reference point during the early stages of decision-making, while their starting status (wealth level at the start of the experiment) becomes the central reference point during the later stages of their multi-period decision-making.
Original languageEnglish
Pages (from-to)193-210
Number of pages18
JournalTheory and Decision
Volume75
Issue number2
DOIs
Publication statusPublished - Aug 2013

Keywords

  • Aspirations
  • Multi-period decision-making
  • Reference points
  • Risk-behavior
  • Risky-choice
  • SHIFTING REFERENCE POINTS
  • FINANCIAL DECISION-MAKING
  • EXPECTED UTILITY
  • PROSPECT-THEORY
  • HOUSE MONEY
  • CHOICE
  • PREFERENCES
  • PSYCHOLOGY
  • PERCEPTION
  • LOSSES

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