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Research in behavioral decision theory suggests that people use reference points as the basis for judging/comparing the value of decision alternatives, but there has been little research addressing how decision reference points are formed. This paper posits and empirically demonstrates a conceptual framework of the reference point formation process for buying decisions. The basic concepts in the framework are supported, and the resulting reference points are shown to influence choice in a manner consistent with prospect theory.
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Christopher P. Puto (1987) studied this question.
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