Reference Dependence in the Housing Market

Reference Dependence and Market Competition∗

This paper studies the implications of consumer reference dependence for market competition. If consumers take some product (e.g., the first product they consider) as the reference point when evaluating others and exhibit loss aversion, then the more “prominent” firm whose product is taken as the reference point by more consumers will randomize over a high and a low price. Relative to the stand...

Reference Dependence and Labor-Market Fluctuations∗

We incorporate reference-dependent worker behavior into a search-matching model of the labor market, in which firms have all the bargaining power and productivity follows a log-linear AR(1) process. Motivated by Akerlof (1982) and Bewley (1999), we assume that existing workers’ output falls stochastically from its normal level when their wage falls below a "reference point", which (following Kő...

The Business Cycles of Urban Housing Market (Case Study: Urban Housing Market of Isfahan, 1980-2014)

H ousing is a commodity with unique features and its market, especially in urban areas, is characterized by unique business cycles that differentiate it from other commodities. On one hand, housing market can be deeply influenced by economic shocks, and on the other hand, the sheer size of housing investments makes the economy particularly vulnerable to any shock in this market. Henc...

The Housing Market in Ghana

Neural evidence for Reference-dependence in real-market-transactions.

Human decision making has become one of the major research-foci in economics, marketing and in neuroscience. This study integrates perspectives from these disciplines by examining neurophysiological correlates to Reference-dependence of utility evaluations in real market contexts both before and after choice. First, by comparing buying and selling decisions, we observe an activation of the amyg...