To access the full text documents, please follow this link:

A theory of reference-dependent behavior
Apesteguia, Jose; Ballester, Miguel A.
Universitat Pompeu Fabra. Departament d'Economia i Empresa
Extensive field and experimental evidence in a variety of environments show that behavior depends on a reference point. This paper provides an axiomatic characterization of this dependence. We proceed by imposing gradually more structure on both choice correspondences and preference relations, requiring increasingly higher levels of rationality, and freeing the decision-maker from certain types of inconsistencies. The appropriate degree of behavioral structure will depend on the phenomenon that is to be modeled. Lastly, we provide two applications of our work: one to model the status-quo bias, and another to model addictive behavior.
Behavioral and Experimental Economics
individual rationality
path independence
status-quo bias
habit formation
L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
Working Paper

Show full item record