Randomizing Endowments: An Experimental Study of Rational Expectations and Reference-Dependent Preferences

  title={Randomizing Endowments: An Experimental Study of Rational Expectations and Reference-Dependent Preferences},
  author={Lorenz Goette and Annette Harms and Charles Sprenger},
  journal={Behavioral \& Experimental Economics eJournal},
We test expectations-based reference dependence in market experiments with probabilistic forced exchange. Kőszegi and Rabin (2006) predict that when the probability of forced exchange increases, individuals cannot expect to stick with the status quo, and should grow more willing to exchange. This mechanism may eliminate and even reverse the “endowment effect” (Knetsch and Sinden 1984; Kahneman, Knetsch, and Thaler 1990). In a series of experiments with overall 930 subjects, we show some… 

Price Expectations and Reference-Dependent Preferences

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Are Reference Points Merely Lagged Beliefs Over Probabilities?

  • Ori Heffetz
  • Psychology
    Journal of Economic Behavior & Organization
  • 2021
What explains the mixed evidence from laboratory tests of Kőszegi and Rabin’s (2006 and later) model of expectations-based reference-dependent preferences? We investigate one hypothesis: to become

Heterogeneity of Loss Aversion and Expectations-Based Reference Points

This project examines the role of heterogeneity in loss aversion for identifying models of expectations-based reference dependence (Kőszegi and Rabin, 2006, 2007) (KR). Different levels of loss

Lagged beliefs and reference-dependent utility

  • Alec Smith
  • Economics
    Journal of Economic Behavior & Organization
  • 2019

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