Endogenizing prospect theory’s reference point

by Ulrich Schmidt and Horst Zank

In previous models of (cumulative) prospect theory reference-dependence of preferences is imposed beforehand and the location of the reference point is exogenously determined. This note provides a foundation of prospect theory, where reference-dependence is derived from preference conditions and a unique reference point arises endogenously. -- Prospect theory ; reference point ; diminishing sensitivity ; loss aversion

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Year of publication:	2010
Authors:	Schmidt, Ulrich ; Zank, Horst
Publisher:	Kiel : Kiel Inst. for the World Economy
Subject:	Prospect Theory \| Prospect theory \| Präferenztheorie \| Theory of preferences \| Theorie \| Theory

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Extent:	Online-Ressource (PDF-Datei: 16 S.)
Series:	Kiel working paper. - Kiel : [Verlag nicht ermittelbar], ISSN 1862-1155, ZDB-ID 2107612-1. - Vol. 1611
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Arbeitspapier ; Working Paper ; Graue Literatur ; Non-commercial literature
Language:	English
Notes:	Systemvoraussetzungen: Acrobat Reader
Other identifiers:	hdl:10419/30262 [Handle]
Classification:	D81 - Criteria for Decision-Making under Risk and Uncertainty
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10003950287