Reference Theory of Choice and ExchangeStanford Center on Conflict and Negotiation, Stanford University, 1990 - Choice (Psychology) - 31 pages |
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advantage y2 Amos Tversky analysis of riskless aversion and diminishing characterization of constant Choice and Exchange choosers concave constant loss aversion constant sensitivity consumer theory convex Daniel Kahneman decision decision problem decomposable reference function denote Dimension 1 Figure diminishing sensitivity disadvantage y₁ disadvantages have greater endowment effect Exchange by Amos following condition holds follows from loss greater impact impact than advantages indifference curves induces systematic distortions Insert Figure Knetsch Loss aversion entails Loss aversion implies MacArthur Park Restaurant marginal marginal utility monthly Stanford calendar original gift P(ASQ P(SQ participants in version prefer $4 prefer the mug preference orders prospect theory r₁ reference gift reference structure satisfies REFERENCE THEORY regular reference function reversals of preference S-shaped value function S₁ Samuelson and Zeckhauser sellers shift of reference sign dependence social contact Stanford University stant loss aversion status quo bias Suppose x1 Theory of Choice tions transaction costs utility function Zeckhauser 1988 г₁