Citation

Tversky A, Kahneman D. Q. J. Econ. 1991; 106(4): 1039-1061.

Copyright

(Copyright © 1991, Harvard University Department of Economics, Publisher MIT Press)

DOI

10.2307/2937956

PMID

unavailable

Abstract

Much experimental evidence indicates that choice depends on the status quo or reference level: changes of reference point often lead to reversals of preference. We present a reference-dependent theory of consumer choice, which explains such effects by a deformation of indifference curves about the reference point. The central assumption of the theory is that losses and disadvantages have greater impact on preferences than gains and advantages. Implications of loss aversion for economic behavior are considered.

Language: en