While reference dependence is a key concept in behavioral economics, it is debated how the reference point is determined. We designed an experiment which can test predictions of different behavioral models (models with status-quo-based versus expectation-based reference points) in the context of information preferences. In our experiment, subjects participate in two monetary lotteries and have to decide how they want to be informed about the outcome of these lotteries. For half of the subjects we frame the lotteries as two gain lotteries, for the other half as two loss lotteries. Prospect theory with a status quo reference point predicts that people want to learn the outcomes of the gain lotteries separately while learning the outcomes of the loss lotteries clumped together. A model with expectations-based reference points (Kőszegi and Rabin, 2009) predicts that irrespective of the frame, loss-aversion makes subjects prefer to learn the outcome of the lotteries clumped together. The experimental data shows that people want to receive information about gains separately, while having no clear preferences regarding information about losses.
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