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Prospect Theory and consumer behavior: Goals and Tradeoffs


  • Florent Buisson

    () (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)


I show that a loss averse consumer who must share her budget between two goods prefer allocations for which consumption equals reference point for at least one good. The phenomenon intensity depends on the curvature of the utility curve. These results are consistent with several stylized facts which cannot be explained by the standard consumer theory.

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  • Florent Buisson, 2013. "Prospect Theory and consumer behavior: Goals and Tradeoffs," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00820722, HAL.
  • Handle: RePEc:hal:cesptp:halshs-00820722
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    References listed on IDEAS

    1. Monnier, Jean-Marie & Vercellone, Carlo, 2007. "Travail, genre et protection sociale dans la transition vers le capitalisme cognitif," European Journal of Economic and Social Systems, Lavoisier, vol. 20(1), pages 15-35.
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    Loss aversion; prospect theory; Aversion pour la perte; théorie des perspectives;

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