|
||||
|
||||
On the Descriptive Value of Loss Aversion in Decisions under Risk
Eyal Ert Technion-Israel Institute of Technology - William Davidson Faculty of Industrial Engineering & Management Ido Erev Technion-Israel Institute of Technology - William Davidson Faculty of Industrial Engineering & Management March 1, 2009 Abstract: Four studies are presented that examine the loss aversion assertion in decisions under risk. We found no evidence for loss aversion in one-shot choices among low magnitude mixed gambles. For example, half of the participants preferred the gamble "1000 with probability 0.5; -1000 otherwise" over "0 with certainty." The effect of losses appears to increase when the experiment is long and boring (includes no feedback), the payoff magnitude is high, and/or the safer option is framed as the status quo. The relationship of these results to previous studies of the loss aversion assertion is discussed.
Keywords: Prospect theory; Relative risk aversion JEL Classifications: C91, D01 Working Paper SeriesDate posted: September 06, 2007 ; Last revised: April 08, 2009Suggested CitationContact Information
|
|
|||||||||||||||
© 2009 Social Science Electronic Publishing, Inc. All Rights Reserved. Terms of Use Privacy Policy
This page was served by apollo3 in 0.265 seconds.