Paper #1056

Título:

A theory of reference-dependent behavior

Autores:

Jose Apesteguia y Miguel A. Ballester

Fecha:

Octubre 2007

Resumen:

Extensive field and experimental evidence in a variety of environments show that behavior depends on a reference point. This paper provides an axiomatic characterization of this dependence. We proceed by imposing gradually more structure on both choice correspondences and preference relations, requiring increasingly higher levels of rationality, and freeing the decision-maker from certain types of inconsistencies. The appropriate degree of behavioral structure will depend on the phenomenon that is to be modeled. Lastly, we provide two applications of our work: one to model the status-quo bias, and another to model addictive behavior.

Palabras clave:

Individual rationality, reference-dependence, rationalization, path independence, status-quo bias, addiction, habit formation, LeeX

Códigos JEL:

A12, B41, D11

Área de investigación:

Economía Experimental y del Comportamiento / Microeconomía

Publicado en:

Economic Theory, 40: 427-455, 2009

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