Loss aversion

About: Loss aversion is a research topic. Over the lifetime, 2898 publications have been published within this topic receiving 115198 citations.

Risk Taking in Financial Decisions as a Function of Age, Gender: Mediating Role of Loss Aversion and Regret

Abstract: The present study investigated how age and gender affect risk taking ability of the investors in their financial decisions through psychological biases such as loss aversion and regret. A total of 450 investors (372 Males, 93 Females) of two age groups (25-40 years and 41-55 years) from northern part of India participated in the study. Conceptual framework was formulated and tested using AMOS 20 to understand the relationship of age, gender and risk taking ability through loss aversion and regret. The results supported our proposed hypotheses. Main results have confirmed the proposed model of analysis, pointing that the impact of age, gender on risk taking ability operates through behavioral biases (loss aversion and regret) of the investors.

Does Inequity Aversion Motivate Punishment? Cleaner Fish as a Model System

Abstract: In human social interactions, punishment is often directed at cheating individuals. Subjective reports and neuro-imaging studies indicate that the experience of interacting with a cheat produces negative emotions and that the act of punishing a cheat assuages these feelings. However, while negative emotions may elicit punishment, the precise source of these emotions remains obscure. Specifically, it is often very difficult to tease apart whether punishing individuals are inequity averse (upset because cheating partner receives more than they should) or, more simply, whether they might be loss averse (upset because their payoffs did not meet their expectations). We compare results on punishment and inequity aversion in humans with results from a non-human model system, the cleaning mutualism between bluestreak cleaner wrasse (Labroides dimidiatus) and its reef-fish ‘clients’. Male cleaner fish are known to punish females that cheat during joint client inspections, but a recent study failed to demonstrate evidence for inequity aversion in this species. We suggest that punishment in cleaner fish may be motivated by loss aversion rather than inequity aversion. Punishment in humans might also often be motivated by loss aversion—and empirical studies that disentangle the two competing motives for punishment are a clear research priority.

Decision-Making in Suicidal Behavior: The Protective Role of Loss Aversion.

Abstract: Background: Loss aversion is a central and well operationalized trait behavior that describes the tendency for humans to strongly prefer avoiding losses to making equivalent gains. Human decision-making is thus biased towards safer choices. Aim: The aim of this study was to explore the relationship between loss aversion and suicidal behavior in a large cohort of adolescents recruited in 30 schools of seven European countries for a longitudinal study (Current Controlled Trials ISRCTN65120704). We hypothesized that individuals with higher loss aversion would be less likely to attempt suicide. Methods: A mixed monetary gamble task was used to generate loss aversion scores for each participant. Logistic regression was used to estimate the cross-sectional association between loss aversion and life-time suicide attempts in the baseline sample (N = 2158; 156 attempters), and incident attempts were predicted in a four-month prospective model (N = 1763; 75 attempters). Multiple regression was used to estimate the association between loss aversion and suicidal ideation. Results: Loss aversion was a significant predictor of attempted suicide in both the cross-sectional (OR = .79; P = .005) and prospective analysis (OR = .81; P = .040), adjusting for depression, anxiety, stress, and sex. The correlation between pre and post measures of loss aversion was r = .52 (P < .001). Interestingly, although depression, anxiety and stress was associated with suicidal ideation, loss aversion was not (cross-sectional model: P = .092; Prospective model: P = .390). This suggests the concept of loss aversion may be useful in understanding the transition from suicidal thoughts to attempts. Conclusions: This and previous studies suggest that altered decision-making is involved in suicide attempts. In our study we show the involvement of loss aversion in particular, and propose that individuals high in loss aversion are discouraged from carrying out the suicide attempt because of a greater focus on the negative consequences of the decision.