Gain and Loss Learning Differentially Contribute to Life Financial Outcomes
Stanford University - Psychology
Gregory R. Samanez-Larkin
Vanderbilt University - Department of Psychology
Camelia M. Kuhnen
Northwestern University - Kellogg School of Management
September 1, 2011
PLOS ONE, Vol. 6, No. 9, September 2011
Emerging findings imply that distinct neurobehavioral systems process gains and losses. This study investigated whether individual differences in gain learning and loss learning might contribute to different life financial outcomes (i.e., assets versus debt). In a community sample of healthy adults (n=75), rapid learners had smaller debt-to-asset ratios overall. More specific analyses, however, revealed that those who learned rapidly about gains had more assets, while those who learned rapidly about losses had less debt. These distinct associations remained strong even after controlling for potential cognitive (e.g., intelligence, memory, and risk preferences) and socioeconomic (e.g., age, sex, ethnicity, income, education) confounds. Self-reported measures of assets and debt were additionally validated with credit report data in a subset of subjects. These findings support the notion that different gain and loss learning systems may exert a cumulative influence on distinct life financial outcomes.
Number of Pages in PDF File: 30
Keywords: neuroeconomics, neurofinance, financial decision making, learning, gain, loss
JEL Classification: C91, D83, G11Accepted Paper Series
Date posted: September 17, 2011
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