The Context, or Reference, Dependence of Economic Values

Further Evidence and Some Predictable Patterns

Authored by: Jack L. Knetsch , Fang-Fang Tang

Handbook of Contemporary Behavioral Economics

Print publication date:  July  2006
Online publication date:  January  2015

Print ISBN: 9780765613028
eBook ISBN: 9781315703879
Adobe ISBN: 9781317469162


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The available empirical evidence is frequently at odds with the stability of preferences, fungibility, and procedural invariance assumptions of standard theory and economic practice. The findings indicate that instead of according with the usual axioms, people’s preferences commonly depend on the context, or the reference position, in which valuations are made. The numerous recent reports of such discrepancies reflect both the ease of demonstrating them and the consistency of results across a range of search methods.

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