Local Status and Prospect Theory

People are sometimes risk-averse in gains but risk-loving in losses. Such behavior and other anomalies underlying prospect theory arise from a model of local status maximization in which consumers compare their wealth with other consumers of similar wealth. This social explanation shares key features with the psychological explanation o.ered by Kahneman and Tversky.

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Year of publication:	2000
Authors:	Harbaugh, Rick ; Kornienko, Tatiana
Publisher:	Claremont, CA : Claremont McKenna College, Department of Economics
Subject:	prospect theory \| status \| reference group \| loss aversion \| risk loving

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Series:	Claremont Colleges Working Papers in Economics ; 2000-38
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	873664124 [GVK] hdl:10419/94619 [Handle] RePEc:clm:clmeco:2000-38 [RePEc]
Classification:	D81 - Criteria for Decision-Making under Risk and Uncertainty ; D11 - Consumer Economics: Theory
Source:	EconStor

Persistent link: https://www.econbiz.de/10010334588