IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2506.13382.html
   My bibliography  Save this paper

Varying reference-point salience

Author

Listed:
  • Alex Krumer
  • Felix Otto
  • Tim Pawlowski

Abstract

The salience of reference points and expectations may significantly influence the loss aversion mechanism in effort provision. We exploit a natural experiment where highly professional and incentivized individuals perform their task in a setting with exogenous variation of reference-point salience. While a relevant reference point is salient in some cases, where it influences individuals' expectations, it is obscured in others. This enables us to examine the interplay between reference-point salience and expectation-based loss aversion in shaping effort provision. Exploiting quasi-random variation around the reference point, our regression discontinuity analyses reveal that individuals with positive expectations outperform those with negative expectations only when the reference point is salient.

Suggested Citation

  • Alex Krumer & Felix Otto & Tim Pawlowski, 2025. "Varying reference-point salience," Papers 2506.13382, arXiv.org.
    • Handle: RePEc:arx:papers:2506.13382
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2506.13382
    File Function: Latest version
    Download Restriction: no
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2506.13382. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.