Theory and Decision

, Volume 75, Issue 2, pp 193–210

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

Authors

    • Department of Finance, School of Business and EconomicsMaastricht University
    • Network for Studies on Pensions, Aging and Retirement (Netspar)
  • Sam F. Henry
    • Department of Finance, School of Business and EconomicsMaastricht University
  • Nikos Kalogeras
    • Department of Marketing and Supply Chain Management, School of Business and EconomicsMaastricht University
    • European Center of Corporate Engagement (ECCE), School of Business and EconomicsMaastricht University
Open AccessArticle

DOI: 10.1007/s11238-012-9323-6

Cite this article as:
Hoffmann, A.O.I., Henry, S.F. & Kalogeras, N. Theory Decis (2013) 75: 193. doi:10.1007/s11238-012-9323-6

Abstract

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.

Keywords

AspirationsMulti-period decision-makingReference pointsRisk-behaviorRisky-choice
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Copyright information

© The Author(s) 2012