Back
Reference Points and Effort Provision
Journal article

Reference Points and Effort Provision

  • Abeler, Johannes University of Nottingham, School of Economics, Nottingham, NG7 2RD, UK.
  • Falk, Armin University of Bonn, Adenauerallee 24, 53113 Bonn, Germany.
  • Goette, Lorenz University of Lausanne, Department of Economics, Internef, 1015 Lausanne, Switzerland.
  • Huffman, David Swarthmore College, Economics Department, 500 College Ave., Swarthmore, PA 19081.
Published in:
  • American Economic Review. - American Economic Association. - 2011, vol. 101, no. 2, p. 470-492
Economics and Econometrics
English A key open question for theories of reference-dependent preferences is: what determines the reference point? One candidate is expectations: what people expect could affect how they feel about what actually occurs. In a real-effort experiment, we manipulate the rational expectations of subjects and check whether this manipulation influences their effort provision. We find that effort provision is significantly different between treatments in the way predicted by models of expectation-based, reference-dependent preferences: if expectations are high, subjects work longer and earn more money than if expectations are low. (JEL D12, D84, J22)
Language
  • English
Open access status
green
Identifiers
Persistent URL
https://sonar.ch/global/documents/161545
Statistics
Document views: 22 File downloads: