Canonical Riskless Choice Over Bundles: Aint No Reference Point Here

摘要: Prospect Theory (Kahneman and Tversky 1979), one of the most prominent models for valuation goods money, presumes that people have convex utility over gains concave losses; a discontinuity at something like current wealth level or reference point. This reflects behavioral pattern confirmed in hundreds experimental studies where lottery tasks show decreasing marginal (risk aversion) increasing seeking) losses relative to this ?reference?. Although it is widely assumed point also required describe riskless choices made bundles goods, there less empirical evidence claim. In paper, using incentive-compatible methods, we challenge generality assumption. We find choice canonical budget set experiment, gain-loss asymmetries are not observed even while interleaved observed, same subjects. Our results suggest between value functions inferred from standard lotteries indifference curves choice.