The impact of (social) anchors on Prospect Theory's value function

Sebastian Krull; David D. Loschelder; Matthias Pelster

doi:10.1016/j.qref.2024.101916

The impact of (social) anchors on Prospect Theory's value function

Research output: Journal contributions › Journal articles › Research › peer-review

Authors

Sebastian Krull
David D. Loschelder
Matthias Pelster

Professorship of business and social psychology & methods

Anchoring impacts risk-taking decisions. This paper provides experimental evidence (n = 744) that (social) anchors shift the Prospect Theory's value function (Kahneman and Tversky, 1979; Tversky and Kahneman, 1992). We observe that extreme (social) anchors lead to shifts in the value function, indicating a change in risk-taking. Anchors that are in line with risk-averse (risk-seeking) behavior lead, relative to the baseline, to more risk-averse (risk-seeking) decisions. Our findings are similar for social and non-social environments.

Original language	English
Article number	101916
Journal	Quarterly Review of Economics and Finance
Volume	98
Number of pages	11
ISSN	1062-9769
DOIs	https://doi.org/10.1016/j.qref.2024.101916
Publication status	Published - 12.2024

Bibliographical note

Publisher Copyright:
© 2024 The Author(s)

Research areas

Anchoring, Decisions under risk, Peer effects, Risk-taking, Social interactions
Business psychology
Management studies

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Research output: Journal contributions › Journal articles › Research › peer-review

DOI

https://doi.org/10.1016/j.qref.2024.101916
Final published version

The impact of (social) anchors on Prospect Theory's value function

Authors

Bibliographical note

Research areas

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