Axiomatic reference-dependence in behavior toward others and toward risk

B-Tier
Journal: Economic Theory
Year: 2006
Volume: 28
Issue: 3
Pages: 681-692

Score contribution per author:

2.011 = (α=2.01 / 1 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This paper considers the applicability of the standard separability axiom for both risk and other-regarding preferences, and advances arguments why separability might fail. An alternative axiom, which is immune to these arguments, leads to a preference representation that is additively separable in a reference variable and the differences between the other variables and the reference variable. For other-regarding preferences the reference variable is the decision-maker’s own payoff, and the resulting representation coincides with the Fehr-Schmidt model. For risk preferences the reference variable is initial wealth, and the resulting representation is a generalization of prospect theory. Copyright Springer-Verlag Berlin/Heidelberg 2006

Technical Details

RePEc Handle
repec:spr:joecth:v:28:y:2006:i:3:p:681-692
Journal Field
Theory
Author Count
1
Added to Database
2026-01-26