Sorry, we are unable to provide the full text but you may find it at the following locations. The case of supermarket refrigeration 1 volume 8 issue 1 heather klemick, elizabeth kopits, ann wolverton. This paper pits neoclassical theory against prospect theory by investigating data drawn from more than 375 subjects actively participating in a wellfunctioning marketplace. Neoclassical theory versus prospect theory wiley online library. Neoclassical theory postulates that preferences between two goods are independent of the consumers current entitlements. Several experimental studies have recently provided strong evidence that this basic independence assumption, which is used in most theoretical and applied economic models to assess the operation of markets, is rarely appropriate. Potential barriers to improving energy efficiency in commercial buildings. Several experimental studies have provided evidence that suggest indifference curves have a kink around the current endowment level. The pattern of results suggests that prospect theory adequately organizes behavior among inexperienced consumers, but consumers with intense market experience behave. Thirty years of prospect theory in economics american economic. To complement the above find ings, i estimate the following probit model with data from treatments e and e mug 1. List, title neoclassical theory versus prospect theory. Potential barriers to improving energy efficiency in.
Prospect theory assumes that losses and gains are valued differently, and thus individuals make decisions based on perceived gains instead of perceived losses. In all three cases, the data, which are drawn from nearly 500 subjects activel y participating in a wellfunctioning marketplace, suggest that prospect theory adequately organizes behavior among inexperienced consumers. Pdf the workhorses of economic analysis are simple formal models that can. This paper pits neoclassical theory against prospect theory by investigating data drawn from more than 375 subjects actively participating in a well. Several experimental studies have recently provided strong evidence that this basic independence assumption, which is used in most theoretical and applied economic models to assess the operation of markets.
Reconsidering the effect of market experience on the endowment effect. This paper pits neoclassical theory against prospect theory by investigating three clean tests of the competing hypotheses. Although analysis of the raw data provides evidence that is consonant with the notion that market experience attenuates the anomaly, there has been no attempt to control other factors that may influence the endowment effect. The pattern of results suggests that prospect theory adequately organizes behavior among inexperienced consumers, but consumers with intense market. The pattern of results suggests that prospect theory adequately organizes behavior among inexperienced consumers, but consumers with intense market experience behave largely in accordance with neoclassical predictions.
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