Lagged beliefs and reference-dependent utility

Models of expectation-based reference-dependent preferences proposes that the reference point to which consumption outcomes are compared is endogenously determined as a function of lagged, probabilistic beliefs. This paper presents an experiment designed to test some predictions of expectation-based reference dependence models. The design induces a stochastic reference point via a lottery and then measures valuations for a commodity. The experimental results find no effect of the first stage lottery on commodity valuation.