Aspirations as reference points: an experimental investigation of risk behavior over time

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2013

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Hoffmann, A.
Henry, S.
Kalogeras, N.

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Theory and Decision: an international journal for multidisciplinary advances in decision sciences, 2013; 75(2):193-210

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Arvid O. I. Hoffmann; Sam F. Henry; Nikos Kalogeras

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This paper examines the importance of aspirations as reference points in a multi-period decision-making context. After stating their personal aspiration level, 172 individuals made six sequential decisions among risky prospects as part of a choice experiment. The results show that individuals make different risky-choices in a multi-period compared to a single-period setting. In particular, individuals’ aspiration level is their main reference point during the early stages of decision-making, while their starting status (wealth level at the start of the experiment) becomes the central reference point during the later stages of their multi-period decision-making.

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© The Author(s) 2012. This article is published with open access at Springerlink.com. This article is distributed under the terms of the Creative Commons Attribution License which permits any use, distribution, and reproduction in any medium, provided the original author(s) and the source are credited.

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