Theory and Decision

, Volume 75, Issue 2, pp 193–210

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

  • Arvid O. I. Hoffmann
  • Sam F. Henry
  • Nikos Kalogeras
Open Access
Article

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

Aspirations Multi-period decision-making Reference points Risk-behavior Risky-choice 

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Copyright information

© The Author(s) 2012

Authors and Affiliations

  • Arvid O. I. Hoffmann
    • 1
    • 2
  • Sam F. Henry
    • 1
  • Nikos Kalogeras
    • 3
    • 4
  1. 1.Department of Finance, School of Business and EconomicsMaastricht UniversityMaastrichtThe Netherlands
  2. 2.Network for Studies on Pensions, Aging and Retirement (Netspar)TilburgThe Netherlands
  3. 3.Department of Marketing and Supply Chain Management, School of Business and EconomicsMaastricht UniversityMaastrichtThe Netherlands
  4. 4.European Center of Corporate Engagement (ECCE), School of Business and EconomicsMaastricht UniversityMaastrichtThe Netherlands

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