Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • 2022
  • Working Paper

Heterogeneity of Gain-Loss Attitudes and Expectations-Based Reference Points

By: Pol Campos-Mercade, Lorenz Goette, Thomas Graeber, Alex Kellogg and Charles Sprenger
  • Format:Print
  • | Language:English
  • | Pages:150
ShareBar

Abstract

Existing tests of reference-dependent preferences assume universal loss aversion. This paper examines heterogeneity in gain-loss attitudes, and explores its implications for identifying models of the reference point. In two experimental settings we measure gain-loss attitudes, and then study a canonical treatment effect which distinguishes different models of the reference point. Accounting for measurement error, we document substantial heterogeneity in gain-loss attitudes, with approximately threequarters loss-averse subjects. We then document heterogeneous treatment effects over gain-loss attitudes consistent with formulations of expectations-based reference points. Our findings provide foundational support for reference points derived from expectations, and explain inconsistencies across prior exercises.

Keywords

Reference-dependent Preferences; Rational Expectations; Personal Equilibrium; Endowment Effect; Expectations-based Reference Points

Citation

Campos-Mercade, Pol, Lorenz Goette, Thomas Graeber, Alex Kellogg, and Charles Sprenger. "Heterogeneity of Gain-Loss Attitudes and Expectations-Based Reference Points." Working Paper, August 2022.
  • Read Now

About The Author

Thomas W. Graeber

Negotiation, Organizations & Markets
→More Publications

More from the Authors

    • February 2025
    • Faculty Research

    Managing Complexity at mymuesli

    By: Thomas Graeber and Stacy Straaberg
    • 2024
    • Faculty Research

    Categorical Processing in a Complex World

    By: Marco Sammon, Thomas Graeber and Christopher Roth
    • October 2024
    • Faculty Research

    Deepa Bachu: Design Thinking at Pensaar

    By: Thomas Graeber and Joshua Schwartzstein
More from the Authors
  • Managing Complexity at mymuesli By: Thomas Graeber and Stacy Straaberg
  • Categorical Processing in a Complex World By: Marco Sammon, Thomas Graeber and Christopher Roth
  • Deepa Bachu: Design Thinking at Pensaar By: Thomas Graeber and Joshua Schwartzstein
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Digital Accessibility
Copyright © President & Fellows of Harvard College.