Prospect Theory with Reference Points in the Opportunity Set

Abstract

Many empirical studies have shown that preferences are reference-dependent, implying loss aversion.\nBecause reference-dependence is a relatively new concept, there exists little theory on it. The theories that\nare available generally take the reference point as given and then impose the traditional assumptions such\nas completeness of preferences. Reference-dependence raises, however, new problems that do not occur in\nreference-independent theories. This paper argues that in the empirically realistic case

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 3 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.