Heterogeneity of Gain-Loss Attitudes and Expectations-Based Reference Points
This project examines the role of heterogeneity in gain-loss attitudes for identifying models of expectations-based reference dependence \citep{Koszegi/Rabin/2006, Koszegi/Rabin/2007} (KR). Different gain-loss attitudes lead to different signs for KR comparative statics. Failure to account for the known heterogeneity in gain-loss attitudes is a central confounding factor challenging prior tests of the KR model conducted under the assumption of universal loss aversion. We document heterogeneous treatment effects over gain-loss types in both an initial experiment and an exact replication. Recognizing heterogeneity over types allows us to both recover the KR model’s central predictions, and account for inconsistency across prior empirical tests.

Please sign up for meetings here: docs.google.com/spreadsheets/d/1H_jaaUTwZLE_NMr7YWG-hz8JUkuXg3YzUdqZKOg33z0/edit#gid=0
Date: 10 November 2020, 16:00 (Tuesday, 5th week, Michaelmas 2020)
Venue: Seminar Room B
Speaker: Charles Sprenger (Caltech)
Organising department: Department of Economics
Part of: Applied Microeconomics Seminar
Booking required?: Not required
Audience: Members of the University only
Editor: Melis Clark