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Journal of Risk and Uncertainty 51, 3 (2015) 245-266
A growing body of literature studies the effects of aspiration levels on people’s choices. Researchers often assume an aspiration level at zero, which helps to explain several empirical phenomena. In two experiments, we test this assumption. Our experimental design exploits the discontinuity in the utility function at the aspiration level. The lotteries vary in complexity in terms of the number of outcomes and the use of round or non-round probabilities. We do not find support for an aspiration level at zero, neither for simple lotteries nor for complex lotteries. Overall, our aggregate results are consistent with prospect theory, but can also be explained by a population with heterogeneous aspiration levels instead of a homogeneous aspiration level at zero.