Self-image concerns play a crucial role in economic decision-making. I conduct a laboratory experiment and offer a theoretical framework to examine whether self-image concerns are reference-dependent and whether individuals react differently to gains and losses in selfimage. I focus on intelligence, a self-image-relevant domain, and find that individuals update their beliefs about performance more strongly if they experience losses than gains in selfimage. On average, individuals tend to avoid self-image-relevant feedback in case of gains and losses in self-image. However, the willingness to acquire self-image-relevant feedback increases if the difference between the posterior and the prior beliefs about performance increases.
Self-image concerns play a crucial role in economic decision-making. I conduct a laboratory experiment and offer a theoretical framework to examine whether self-image concerns are reference-dependent and whether individuals react differently to gains and losses in selfimage. I focus on intelligence, a self-image-relevant domain, and find that individuals update their beliefs about performance more strongly if they experience losses than gains in selfimage. On average, individuals tend to avoid self-image-relevant feedback in case of gains and losses in self-image. However, the willingness to acquire self-image-relevant feedback increases if the difference between the posterior and the prior beliefs about performance increases.
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Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence.
This paper explores whether loss aversion applies to social image concerns. In a simple model, we combine loss aversion in social image concerns and attitudes towards lying. We then test its predictions in a laboratory experiment. Subjects are first ranked publicly in a social image relevant domain, intelligence. This initial rank serves as within-subject reference point. After inducing an exogenous change in subjects' rank across treatments, subjects are offered scope for lying to improve their final rank. We find evidence for loss aversion in social image concerns. Subjects who face a loss in social image lie more than those experiencing gains if they sufficiently care about social image and have a reputation to lose. Individual-level analyses document a discontinuity in lying behavior when moving from rank losses to gains, indicating a kink in the value function for social image.
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