Caution and Reference Effects

• 成果类型: Article
• 署名作者: Cerreia-Vioglio, Simone; Dillenberger, David; Ortoleva, Pietro
• 署名单位: Bocconi University; University of Pennsylvania; Princeton University
• 刊物名称: ECONOMETRICA
• ISSN/ISSBN: 0012-9682
• DOI: 10.3982/ECTA21748
• 发表日期: 2024
• 页码: 2069-2103
• 关键词: Loss aversion; prospect-theory; IMPRECISE PREFERENCES; experimental tests; endowment; utility; CHOICE; allais; experience; decisions

摘要

We introduce Cautious Utility, a new model based on the idea that individuals are unsure of trade-offs between goods and apply caution. The model yields an endowment effect, even when gains and losses are treated symmetrically. Moreover, it implies either loss aversion or loss neutrality for risk, but in a way unrelated to the endowment effect, and it captures the certainty effect, providing a novel unified explanation of all three phenomena. Cautious Utility can help organize empirical evidence, including some that directly contradicts leading alternatives.