Aspirations as reference points: an experimental investigation of risk behavior over time
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- Hoffmann, A.O.I., Henry, S.F. & Kalogeras, N. Theory Decis (2013) 75: 193. doi:10.1007/s11238-012-9323-6
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.