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Testing the Reference-Dependent Model: A Laboratory Search Experiment

Author

Listed:
  • Miura, Takahiro

    (Kansai University)

  • Inukai, Keigo

    (Meiji Gakuin University)

  • Sasaki, Masaru

    (Osaka University)

Abstract

Our paper conducts laboratory experiments with the sequential search model to test whether participants engage in search activities in line with theoretical predictions derived from the expected utility model or the reference-dependent model, without assuming any specific formulation rule for a reference point. Our experimental results showed that the participants' search behavior did not align with the reference-dependent model. In addition, the correlation between individual preferences and search behavior reinforced our experimental results; that is, loss aversions were not significantly correlated with search behavior.

Suggested Citation

  • Miura, Takahiro & Inukai, Keigo & Sasaki, Masaru, 2019. "Testing the Reference-Dependent Model: A Laboratory Search Experiment," IZA Discussion Papers 12378, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp12378
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    References listed on IDEAS

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    More about this item

    Keywords

    sequential search; loss aversion; risk preference;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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