Research On The Influence Mechanism Of Expectation-based Reference Points On Individual Decisions

Based on the Prospect Theory of Kahneman and Tversky and the actual decisionmaking phenomenon,this thesis focuses on the following issues.If the decision-makers have expected the future decision-making outcomes,wether the decision-makers' reference points are based on their expectations of the outcomes,and how does the expectation-based reference point influence the decision maker's preferences and willingness.This topic was systematically studied by proposing the point,theoretical and experimental analyisis,as well as the practical application of the conclusion.The reference point in this study is defined as judging criteria used in judgment on the value of the gain or loss.Found on the existing research conclusions,we proposed that the individual decision maker take the expectation as the reference point,and the reference point includes the two dimensions of occurrence probability expectation and consumption utility expectation.Besides,based on the reference-dependent utility function proposed by K?szegi and Rabin,the above two dimensions were embodied in the reference point factor in the gain-loss utility,and the gain-loss utility function of expectation-based reference point was given.After that,we designed three experiments based on loss aversion to verify the three hypotheses based on this point of view and draw conclusions.When the decision makers anticipate the outcome of the decision,if the consumption utility is known to be certain,the reference point is based on the occurrence probability expectation,instead of its status quo,and the decision maker shows a loss aversion around it;If the occurrence probability is known to be certain,the reference point is based on the consumption utility expectation,instead of its status quo,and decision maker shows loss aversion around it;the decision maker's willingness to pay is affected by the expectation-based reference point.The higher the expectation,the greater the WTP value and vice versa.The application of the conclusions of this thesis can be mainly manifested in three aspects.Explaining the effect of sunk cost,theoretical guidance for formulating sales strategy,and theoretical guidance for improving subjective well-being and achieving personal goals.