Attitudes toward Success and Failure
Abstract
Individuals often attach a special meaning to attaining a certain goal, and getting past a threshold marks the difference between success and failure. In this paper, we take a standard expected utility (EU) setting with an exogenous reference point that separates success from failure and define attitudes toward success and failure as features of preferences over lotteries. The distinctive feature of our definitions is that they concern a local reversal of the decision-maker’s risk attitude across the reference point. Our findings provide a unified view of several well-known models of reference-dependent preferences and suggest new forms of comparative statics exercises. (JEL D11, D44, D81, D91)
Fields of Study & Subjects
Decision-Making and Behavioral Economics
Experimental Behavioral Economics Studies
Economic and Environmental Valuation
Publication details
- Journal / source
- American Economic Journal Microeconomics
- Volume
- 18
- Issue
- 1
- Pages
- 105–145
- Publication date
- 28 January 2026
- Language
- EN