realistic expectations later on. This paper shows that the costs induced by high aspirations are not trivial. We first develop a … evidence from a lab experiment on the factor found to be crucial: the adjustment of reference states to changes in expectations …

The paper introduces the concept of adjustment utility, that is, referencedependent utility from expectations. It …

candidate is expectations: what people expect could affect how they feel about what actually occurs. In a real-effort experiment …, we manipulate the rational expectations of subjects and check whether this manipulation influences their effort provision …-based reference-dependent preferences: if expectations are high, subjects work longer and earn more money than if expectations are low. …

Previous experimental investigations have shown that expectations are not perfectly rational due to bias. Traditional … adaptive models, however, in many cases do not perfectly describe the formation of expectations either. This paper makes two … contributions to the experimental literature on the formation of expectations: First, we investigate whether subjects who have more …

candidate is expectations: what people expect could affect how they feel about what actually occurs. In a real-effort experiment …, we manipulate the rational expectations of subjects and check whether this manipulation influences their effort provision …-based reference-dependent preferences: if expectations are high, subjects work longer and earn more money than if expectations are low. …

conclusions about the socio-economic factors that determine expectations. …

As evidence is accumulating that subjective expectations influence behavior and that these expectations are sometimes … biased, it becomes policy-relevant to know how to influence individuals' expectations. Information in the media is likely to … real-life expectations formation process. For this purpose, an exceptional Dutch dataset on monthly expectations regarding …