Taste uncertainty and status quo effects in consumer choice

Loomes, Graham, Orr, Shepley and Sugden, Robert (2009) Taste uncertainty and status quo effects in consumer choice. Journal of Risk and Uncertainty, 39. pp. 113-135.

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Abstract

We use reference-dependent expected utility theory to develop a model of status quo effects in consumer choice. We hypothesise that, when making their decisions, individuals are uncertain about the utility that will be yielded by their consumption experiences in different ‘taste states’ of the world. If individuals have asymmetric attitudes to gains and losses of utility, the model entails acyclic reference-dependent preferences over consumption bundles. The model explains why status quo effects may vary substantially from one decision context to another and why some such effects may decay as individuals gain market experience.

Item Type:	Article
Faculty \ School:	Faculty of Social Sciences > School of Economics
UEA Research Groups:	Faculty of Social Sciences > Research Groups > Economic Theory Faculty of Social Sciences > Research Centres > Centre for Behavioural and Experimental Social Sciences Faculty of Social Sciences > Research Centres > Centre for Competition Policy Faculty of Social Sciences > Research Groups > Behavioural Economics
Depositing User:	Gina Neff
Date Deposited:	13 Jan 2011 10:54
Last Modified:	03 Jan 2024 01:52
URI:	https://ueaeprints.uea.ac.uk/id/eprint/19292
DOI:	10.1007/s11166-009-9076-y

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