Deciding When to Quit: Reference-Dependence over Slot Machine Outcomes
American Economic Review · 2015 · Volume 105 · Issue 5
Abstract
We conduct tests for reference dependent loss aversion using slot machine gamblers' decisions on when to quit playing for a visit to a casino. Evidence for a lagged status-quo reference point is found in the aggregate, while endogenously determined reference points are found when conditioning on betting intensity choices. Significant deviations from the distributions implied by random quitting support the loss aversion and diminishing sensitivity hypotheses.
Keywords
Consumer Economics: Empirical Analysis, Criteria for Decision-Making under Risk and Uncertainty, Sports, Gambling, Restaurants, Recreation, Tourism
Enable JavaScript for citation tools and additional paper interactions.