Let his consumption in money, stickers, and airplanes be c1, c2, and c3, respectively, and let his reference points in money, stickers, and airplanes be r1, r2, and r3, respectively. Then, Fox’s utility is given by v(c1 − r1) + v(4c2 − 4r2) + v(4c3 − 4r3), where v(x) = x for x ≥ 0, and v(x) = 2x for x < 0. Normalize Fox’s initial amount of money to zero, and suppose he starts off with zero stickers and zero airplanes.

For the rest of the question, suppose that Fox has two options in the experiment: to buy a sticker for $7, and to buy an airplane for $6.

Suppose Fox arrives at the experiment with a reference point of having one sticker and one airplane (perhaps because he was told he could get these as gifts). His reference point in money is still $0, and he still receives the $8 show-up bonus. Would he buy a sticker for $7 if that was the only choice he was offered?