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

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The impact of (social) anchors on Prospect Theory's value function. / Krull, Sebastian; Loschelder, David D.; Pelster, Matthias.
In: Quarterly Review of Economics and Finance, Vol. 98, 101916, 01.12.2024.

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

Bibtex

@article{c27061ab2d2243128dd09839e2e29fa0,

title = "The impact of (social) anchors on Prospect Theory's value function",

abstract = "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.",

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

author = "Sebastian Krull and Loschelder, {David D.} and Matthias Pelster",

note = "Publisher Copyright: {\textcopyright} 2024 The Author(s)",

year = "2024",

month = dec,

day = "1",

doi = "10.1016/j.qref.2024.101916",

language = "English",

volume = "98",

journal = "Quarterly Review of Economics and Finance",

issn = "1062-9769",

publisher = "Elsevier B.V.",

}

RIS

TY - JOUR

T1 - The impact of (social) anchors on Prospect Theory's value function

AU - Krull, Sebastian

AU - Loschelder, David D.

AU - Pelster, Matthias

PY - 2024/12/1

Y1 - 2024/12/1

N2 - 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.

AB - 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.

KW - Anchoring

KW - Decisions under risk

KW - Peer effects

KW - Risk-taking

KW - Social interactions

KW - Business psychology

KW - Management studies

UR - http://www.scopus.com/inward/record.url?scp=85203144824&partnerID=8YFLogxK

UR - https://www.mendeley.com/catalogue/727c5589-d7cc-3f3d-b653-821b48e6e543/

U2 - 10.1016/j.qref.2024.101916

DO - 10.1016/j.qref.2024.101916

M3 - Journal articles

AN - SCOPUS:85203144824

VL - 98

JO - Quarterly Review of Economics and Finance

JF - Quarterly Review of Economics and Finance

SN - 1062-9769

M1 - 101916

ER -

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DOI

https://doi.org/10.1016/j.qref.2024.101916
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The impact of (social) anchors on Prospect Theory's value function

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Related by journal

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