Exogenous Endowment—Endogenous Reference Point

Maltz, Amnon

doi:10.1093/ej/uez044

Cited by 13 publications

(7 citation statements)

References 37 publications

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“…24 A more recent literature allows the reference point to be endogenous, but still assumes that the reference point to a large extent depends on the initial endowment (Barbos, 2010;De Giorgi and Post, 2011;Guney et al, 2018;Koszegi, 2006;Maltz, 2020;Ok et al, 2015). Note that our setting can accommodate the existence of loss aversion in the Reward treatment as long as participant reference point is close to their initial endowment of zero or at least below 5e.…”

Section: Designmentioning

confidence: 99%

Loss-Framed Incentives and Employee (Mis-)Behavior

et al. 2022

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This paper explores how loss-framed incentives affect behavior in a multitasking environment in which participants have more than one way of recovering (expected) losses. In a real-effort laboratory experiment, we offer participants task incentives that are framed as either a reward (gain) or penalty (loss). We study their responses along three dimensions: performance in the incentivized task, theft, and voluntary provision of help. We find that framing incentives as a penalty rather than as a reward does not significantly improve task performance, but it increases theft and leads to a small and insignificant reduction in the share of participants willing to help the experimenter. Secondary analyses based on our theoretical framework help us pin down the mechanism at play and suggest that loss aversion drives participants’ response. Our findings have important implications for incentive design in practice. This paper was accepted by Axel Ockenfels, behavioral economics and decision analysis.

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Section: Designmentioning

confidence: 99%

Loss-Framed Incentives and Employee (Mis-)Behavior

et al. 2022

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“…In building these hypotheses, we base our approach on the arguments of Maltz [81] who suggests that there are various choice contexts in which a person's reference point is 'naturally' linked to both endogenous and exogenous determinants. Maltz's [81] argument is that there are cases where the agent's exogenous endowment or status quo option or a risk calculation point [82,83] is linked to an endogenously determined reference point defined either by the person himself/herself [84,85], or by his/her economic environment [86].…”

Section: Hypothesismentioning

confidence: 99%

Regional Social Capital and Economic Growth: Exploratory Evidence from Testing the Virtuous Spiral vs. Vicious Cycle Model for Greece

Daskalopoulou

Karakitsiou

2020

Sustainability

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The aim of the present study is to analyze social capital as a spatial resource that regions might use differently in their developmental process. We propose a theoretical framework in order to identify the different regional social capital workings as leading to either an open system of relations (the virtuous social capital—development spiral) or to a rather closed system of relations (the vicious social capital—development cycle). At the empirical level, we test the presence of these two developmental paths by two operational hypotheses that are tested through the development and use of appropriate entropy technique for order of preference by similarity to ideal solution (TOPSIS) techniques. Our analysis involves an inclusive theorization of social capital as composed of trust, norms/values, and networks. Using individual and aggregate level economic indicators, we obtain different rankings of the Greek regions compared to the initial entropy weights rankings. Overall, our results provide support to the presence of both developmental paths in the case of Greece while the Greek regions might be categorized as dynamic, stagnant, and unstable.

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“…22 Maltz [2017] is the only model of which we are aware that combines an exogenous reference point with endogenous reference-point formation.…”

Section: Related Literaturementioning

confidence: 99%

Choice with Endogenous Categorization

Ellis¹,

Masatlıoĝlu²

2020

Preprint

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We propose a novel categorical thinking model (CTM) where the framing of the decision problem affects how the agent categorizes each product, and the product's category affects her evaluation of the product. We show that a number of prominent models of salience, status quo bias, loss-aversion, inequality aversion, and present bias all fit under the umbrella of CTM. This suggests categorization as an underlying mechanism for key departures from the neoclassical model of choice and an account for diverse sets of evidence that are anomalous from its perspective. We specialize CTM to provide a behavioral foundation for the salient thinking model of Bordalo et al. [2013], highlighting its strong predictions and distinctions from other existing models.

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Exogenous Endowment—Endogenous Reference Point

Cited by 13 publications

References 37 publications

Loss-Framed Incentives and Employee (Mis-)Behavior

Loss-Framed Incentives and Employee (Mis-)Behavior

Regional Social Capital and Economic Growth: Exploratory Evidence from Testing the Virtuous Spiral vs. Vicious Cycle Model for Greece

Choice with Endogenous Categorization

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