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Self-Serving Biased Reference Points in Bankruptcy Problems

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  • Andrea Gallice

    (Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino, Italy)

Abstract

I formalize the notion of self-serving bias within the framework of reference-dependent preferences. Self-serving bias affects agents' expectations in a systematic way and, through this channel, it influences their reference points. I then apply the model to bankruptcy problems and provide a ranking of standard allocative rules on the basis of the level of welfare that they generate.

Suggested Citation

  • Andrea Gallice, 2020. "Self-Serving Biased Reference Points in Bankruptcy Problems," Working papers 067, Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino.
    • Handle: RePEc:tur:wpapnw:067
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    File URL: https://www.bemservizi.unito.it/repec/tur/wpapnw/m67.pdf
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    References listed on IDEAS

    as
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    Cited by:

    1. Andrea Gallice, 2022. "Bankruptcy Problems with Self-Serving Biased Reference Points," Carlo Alberto Notebooks 683 JEL Classification: D, Collegio Carlo Alberto.

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    More about this item

    Keywords

    Self-serving bias; Reference dependent preferences; Bankruptcy problems.;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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