Revealed Preference Foundations of Expectations-Based Reference-Dependence
David J Freeman*
Last modified: 2013-04-17
Abstract
This paper provides revealed preference foundations for a model of expectations-based reference-dependence à la Kőszegi and Rabin (2006). Novel axioms provide distinguishing features of expectations-based reference-dependence under risk. The analysis completely characterizes the model's testable implications when expectations are unobservable.