American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Attitudes toward Success and Failure
American Economic Journal: Microeconomics
(pp. 105–45)
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.Citation
Alaoui, Larbi, and Antonio Penta. 2026. "Attitudes toward Success and Failure." American Economic Journal: Microeconomics 18 (1): 105–45. DOI: 10.1257/mic.20240429Additional Materials
JEL Classification
- D11 Consumer Economics: Theory
- D44 Auctions
- D81 Criteria for Decision-Making under Risk and Uncertainty
- D91 Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making