, Volume 75, Issue 2, pp 193-210,
Open Access This content is freely available online to anyone, anywhere at any time.
Date: 13 Jul 2012

Aspirations as reference points: an experimental investigation of risk behavior over time


This paper examines the importance of aspirations as reference points in a multi-period decision-making context. After stating their personal aspiration level, 172 individuals made six sequential decisions among risky prospects as part of a choice experiment. The results show that individuals make different risky-choices in a multi-period compared to a single-period setting. In particular, individuals’ aspiration level is their main reference point during the early stages of decision-making, while their starting status (wealth level at the start of the experiment) becomes the central reference point during the later stages of their multi-period decision-making.