Loss Aversion around a Fixed Reference Point in Highly Experienced Agents∗
نویسندگان
چکیده
We study how reference dependence and loss aversion motivate highly experienced agents, professional basketball players. We find a very large “losing motivates” effect, an average team scores like a league leader when trailing by ten points and a bottom dweller leading by ten. Detailed data on players’ actions shows this effect comes through differential exertion of effort. Using betting spreads and lagged score margin, we test if expectations influence the reference point; they do not. The reference point appears remarkably stable around zero, far less malleable than previously found in experimental work studying less experienced agents. JEL Codes: D03, D84, C9
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