Reference point formation: Does the market whisper in the background?

Well-established studies in behavioral finance confirm that investors are highly influenced by subjective reference points when making economic decisions. Although the literature examines point formation for individual stocks based on observed price sequences, often treated without considering market context. We extend this incorporating information as background to behavior experiment, and we consider both prospect theory anticipation/disappointment-based utility functions a combined framework investigate impact of context formation. Our article provides new evidence insights investment practitioners researchers.