• Media type: Electronic Conference Proceeding
  • Title: Endogenous Prospect Theory
  • Contributor: Schmidt, Ulrich [Author]; Zank, Horst [Author]
  • Published: Frankfurt a. M.: Verein für Socialpolitik, 2010
  • Language: English
  • Keywords: prospect theory ; diminishing sensitivity ; D80 ; C91 ; loss aversion ; reference point ; D81
  • Origination:
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  • Description: In previous models of (cumulative) prospect theory reference-dependence of preferences is imposed beforehand and the location of the reference point is exogenously determined. This paper provides an axiomatization of a new specification of cumulative prospect theory, termed endogenous prospect theory, where reference-dependence is derived from preference conditions and a unique reference point arises endogenously.
  • Access State: Open Access