| This dissertation examines three relevant elements of the decision making context: the frequency of feedback information (Chapter 1), the set of alternatives (Chapter 2), and the history of payoffs (Chapter 2). These elements are introduced as natural determinants of the decision maker's reference point, i.e. they shape what a decision maker will consider good or bad. Thus these elements are crucial for understanding individual preferences, when loss aversion is a major motive for choice.; The analysis of our models predict a large variety of well-documented behavioral "anomalies", and allow us to interpret them, always in terms of loss aversion and reference point shifts. We also generate new predictions. Prescriptively, besides a discussion of applied decision analysis (Chapter 2), we identify beneficial effects of framing in the organizational context, both to reduce conservatism (Chapter 1), and to induce participation (Chapter 3). Each chapter is self-contained and corresponds to a particular hypothesis regarding the reference point formation process. |
