Loomes, Graham, Professor of economics, Orr, Shepley and Sugden, Robert. (2009) Taste uncertainty and status quo effects in consumer choice. Journal of Risk and Uncertainty, Vol.39 (No.2). pp. 113-135. ISSN 0895-5646

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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:	Journal Article
Subjects:	H Social Sciences > HF Commerce
Divisions:	Faculty of Social Sciences > Economics
Journal or Publication Title:	Journal of Risk and Uncertainty
Publisher:	Springer New York LLC
ISSN:	0895-5646
Official Date:	October 2009
Volume:	Vol.39
Number:	No.2
Number of Pages:	23
Page Range:	pp. 113-135
Identification Number:	10.1007/s11166-009-9076-y
Status:	Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Restricted or Subscription Access
Funder:	Economic and Social Research Council (ESRC)
Grant number:	M535255117, RES051270146
URI:	http://wrap.warwick.ac.uk/id/eprint/46055

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