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

Listed author(s):
  • Arvid Hoffmann

    ()

  • Sam Henry
  • Nikos Kalogeras

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. Copyright The Author(s) 2013

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File URL: http://hdl.handle.net/10.1007/s11238-012-9323-6
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Article provided by Springer in its journal Theory and Decision.

Volume (Year): 75 (2013)
Issue (Month): 2 (August)
Pages: 193-210

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Handle: RePEc:kap:theord:v:75:y:2013:i:2:p:193-210
DOI: 10.1007/s11238-012-9323-6
Contact details of provider: Web page: http://www.springer.com

Order Information: Web: http://www.springer.com/economics/economic+theory/journal/11238/PS2

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