J. Forrest Williams
Date of Award
Bachelor of Science (B.S.) in Economics and University Honors
Economics -- Psychological aspects, Performance, Loss aversion
Reference-dependence has been a topic of interest in recent history for the field of economics. It’s implications that utility is not solely based on outcomes, but rather how outcomes are interpreted from a previously set expectation has the potential to effect many aspects of incentive structures. In this research, subjects complete a real effort task in which they are provided with information that creates shocks in their expectations. These shocks make the individual readjust to the new information, impacting performance in the real-effort task. We conclude that reference-dependence performance is impacted by adjusting reference points that may have a positive or negative impact on the individual performance, dependent on the valence of the shock.
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Rojas-Fallas, Jose A., "Reference-Dependence Performance: Managing and Meeting Expectations" (2019). University Honors Theses. Paper 731.