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Rationality, emotions and reference dependent
Abstract
Abstract. This study provides the results of induced estimation of reference dependence based on the original model that included empathy and expectation, personal anger and jealousy, and anger over social justice in the utility function, and clarified the relationship between emotion and reference dependence. The conclusions obtained are the following seven points. First, that the relationship between expectation and reality influences decision making even in economic experiments. Second, the results of examining whether the emotions of the players who changed their behavior between the first and second time were shame or guilt, showed that it was a shame. Third, empathy influences decision making. Fourth, the expectations of others (anticipation) serve as a model of reference dependence. Fifth, that personal anger/jealousy influences decision-making by expectations (anticipation) of others. Sixth, when expectations of others influence decision-making, the emotions are based on personal anger and jealousy. Seventh, the degree of anger toward the free-rider is related to the degree of sanction.
Keywords. Reference dependence; Rationality; Emotion; Decision-making.
JEL. D91.Keywords
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DOI: http://dx.doi.org/10.1453/jest.v9i3.2375
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