Don ’ t aim too high : the potential costs of high aspirations Astrid
نویسندگان
چکیده
The higher our aspirations, the higher the probability that we have to adjust them downwards when forming more realistic expectations later on. This paper shows that the costs induced by high aspirations are not trivial. We first develop a theoretical framework to identify the factors that determine the effect of aspirations on expected utility. Then we present evidence from a lab experiment on the factor found to be crucial: the adjustment of reference states to changes in expectations. The results suggest that the costs of high aspirations can be significant, since reference states do not adjust quickly. We use a novel, indirect approach that allows us to infer the determinants of the reference state from observed behavior, rather than to rely on cheap talk. JEL classification: D11, D84, C91
منابع مشابه
Don ’ t aim too high : the potential costs of high aspirations
The higher our aspirations, the higher the probability that we have to adjust them downwards when forming more realistic expectations later on. This paper shows that the costs induced by high aspirations are not trivial. We first develop a theoretical framework to identify the factors that determine the effect of aspirations on expected utility. Then we present evidence from a lab experiment on...
متن کاملJena Economic Research Papers Don't Aim Too High: the Potential Costs of High Aspirations Don't Aim Too High: the Potential Costs of High Aspirations
The higher our aspirations, the higher the probability that we have to adjust them downwards when forming more realistic expectations later on. This paper shows that the costs induced by high aspirations are not trivial. We first develop a theoretical framework to identify the factors that determine the effect of aspirations on expected utility. Then we present evidence from a lab experiment on...
متن کاملOptimal Capacitor Allocation in Radial Distribution Networks for Annual Costs Minimization Using Hybrid PSO and Sequential Power Loss Index Based Method
In the most recent heuristic methods, the high potential buses for capacitor placement are initially identified and ranked using loss sensitivity factors (LSFs) or power loss index (PLI). These factors or indices help to reduce the search space of the optimization procedure, but they may not always indicate the appropriate placement of capacitors. This paper proposes an efficient approach for t...
متن کاملبررسی مدیریت پسماند بیمارستان های تحت پوشش دانشگاه علوم پزشکی تبریز طی سال های 1389-1390
Background and purpose: Proper and efficient management of hospital wastes because of its infection potential and possession of dangerous wastes is inevitable and this goal can be achieved only when we have a good understanding of the quality and quantity of hospital wastes and enough available information about separation, collection, treatment and disposal of hospital wastes. The aim of this ...
متن کاملEconomic development and convergence clubs: the role of inherited tastes and human capital
We present an overlapping generations model with endogenous growth in which children inherit from the previous generation human capital and life standard aspirations. Adults evaluate their own consumption with respect to a baseline requirement which depends on their parents past consumption. The presence of bequeathed tastes changes signi cantly the dynamic properties of the model. First, start...
متن کامل