Attention and Reference Dependence

نویسندگان

  • Sudeep Bhatia
  • Russell Golman
چکیده

We present a model of reference dependence, which assumes that reference points affect choice by directing the decision maker’s attention towards the particular goods in the reference bundle. This model makes no assumptions about the curvature of utility, and does not assume a built-in asymmetry in gains and losses. Nonetheless it is able to generate loss aversion and can explain a large number of behavioral anomalies related to reference dependence. Additionally, this model produces acyclic sequential choices, and any sequence of short-sighted referencedependent decisions is guaranteed to converge to a stable personal equilibrium. JEL Codes: D03, D11, D87. ∗Address: 5000 Forbes Avenue, Pittsburgh, PA, 15213; e-mail: [email protected], [email protected].

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تاریخ انتشار 2013