First experimental study: A second look at expectations as reference points – the domain of losses

  • Evelyn Stommel


Reference dependency has a long tradition in psychology (Lewin et al., 1944, Siegel, 1957) and it has been applied in behavioral economics with Kahneman and Tversky’s prospect theory. Following Kahneman and Tversky (1979), whether a decision outcome is perceived as a gain or as a loss compared with a subjective reference point has a strong influence on risk attitudes (Hack & Lam-mers, 2008). In principle, individuals show risk aversion in the gain domain and risk-seeking behavior in the loss domain, as well as a significantly greater aver-sion to losses than an appreciation of gains. The literature that examines the individual reference point is relatively poorly conceived, although it is vital to define what constitutes a reference point.


Reference Point Stock Price Prospect Theory Loss Base Loss Control 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

Copyright information

© Springer Fachmedien Wiesbaden 2013

Authors and Affiliations

  • Evelyn Stommel
    • 1
  1. 1.EssenGermany

Personalised recommendations