How to make loss aversion disappear and reverse: Tests of the decision by sampling origin of loss aversion

DOI

In 4 experiments, we tested this proposition by manipulating the range of gains and losses that individuals saw during the process of eliciting their loss aversion. We were able to find loss aversion, loss neutrality, and even the reverse of loss aversion. One of the most robust empirical findings in the behavioral sciences is loss aversion—the finding that losses loom larger than gains. We offer a new psychological explanation of the origins of loss aversion in which loss aversion emerges from differences in the distribution of gains and losses people experience. This network project brings together economists, psychologists, computer and complexity scientists from three leading centres for behavioural social science at Nottingham, Warwick and UEA. This group will lead a research programme with two broad objectives: to develop and test cross-disciplinary models of human behaviour and behaviour change; to draw out their implications for the formulation and evaluation of public policy. Foundational research will focus on three inter-related themes: understanding individual behaviour and behaviour change; understanding social and interactive behaviour; rethinking the foundations of policy analysis. The project will explore implications of the basic science for policy via a series of applied projects connecting naturally with the three themes. These will include: the determinants of consumer credit behaviour; the formation of social values; strategies for evaluation of policies affecting health and safety. The research will integrate theoretical perspectives from multiple disciplines and utilise a wide range of complementary methodologies including: theoretical modeling of individuals, groups and complex systems; conceptual analysis; lab and field experiments; analysis of large data sets. The Network will promote high quality cross-disciplinary research and serve as a policy forum for understanding behaviour and behaviour change.

Experimental data. In Experiment 1a, participants were randomly allocated to one of four conditions. Both gains and losses ranged up to $20 or up to $40 generating a 2 2 design. Experiment 1b is an exact replication of Experiment 1a with new participants. In Experiment 2, we used two distributions for gains and losses, one ranging from $6 to $20 (in $2 increments) and one three times larger, ranging from $18 to $60 (in $6 increments). We only tested the two asymmetric cases. Unlike in Experiments 1a and 1b, the possible gains and losses were randomly drawn and paired from the distributions to produce 64 pairs. Two ranges of gains and losses were used in Experiment 3. Monetary values could range from $5 to $20 (in $1 increments) or from $10 to $40 (in $2 increments). We chose to include both asymmetric treatment conditions, but only one of the symmetric cases (both gains and losses ranging from $10 to $40) to maximize power.

Identifier
DOI https://doi.org/10.5255/UKDA-SN-852944
Metadata Access https://datacatalogue.cessda.eu/oai-pmh/v0/oai?verb=GetRecord&metadataPrefix=oai_ddi25&identifier=dfbf7105fe11d93dfc7547668b5300b8fce3621f3e5fdb71f6c9e906db4de552
Provenance
Creator Stewart, N, University of Warwick
Publisher UK Data Service
Publication Year 2017
Funding Reference Economic and Social Research Council
Rights Neil Stewart, University of Warwick; The Data Collection is available to any user without the requirement for registration for download/access.
OpenAccess true
Representation
Resource Type Numeric
Discipline Psychology; Social and Behavioural Sciences
Spatial Coverage United Kingdom