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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 …
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Several empirical studies provide evidence that their actual health state affects people's attitudes towards health and medical care in hypothetical health states. In the tradition of behavioural economics this paper considers the actual health state as a point of reference and builds a model...
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