Comparing Gains and Losses

8 Pages Posted: 19 Apr 2010 Last revised: 3 Mar 2012

See all articles by A. Peter McGraw

A. Peter McGraw

University of Colorado at Boulder - Department of Marketing

Jeff T. Larsen

Texas Tech University

Daniel Kahneman

Princeton University

David Schkade

University of California, San Diego

Date Written: April 18, 2010


Loss aversion in choice is commonly assumed to arise from the anticipation that losses have a greater effect on feelings than gains, but evidence for this assumption in research on judged feelings is mixed. We argue that loss aversion is present in judged feelings when people compare gains and losses and assess them on a common scale. But many situations in which people judge and express their feelings lack these features. When judging their feelings about an outcome, people naturally consider a context of similar outcomes for comparison (e.g., losses against other losses). This process permits gains and losses to be normed separately and produces psychological scale units for gains and losses that may not be the same in size or meaning. Our experiments show loss aversion in judged feelings for tasks that encourage gain-loss comparisons but not in tasks that discourage them, particularly those using bipolar scales.

Suggested Citation

McGraw, A. Peter and Larsen, Jeff T. and Kahneman, Daniel and Schkade, David, Comparing Gains and Losses (April 18, 2010). Psychological Science, Vol. 21, No. 10, pp. 1438-1445, Available at SSRN:

A. Peter McGraw (Contact Author)

University of Colorado at Boulder - Department of Marketing ( email )

United States

Jeff T. Larsen

Texas Tech University ( email )

2500 Broadway
Lubbock, TX 79409
United States

Daniel Kahneman

Princeton University ( email )

Department of Psychology 3-2-1 Green Hall
Princeton, NJ 08544
United States
609-258-2280 (Phone)
609-258-2809 (Fax)

David Schkade

University of California, San Diego ( email )

Rady School of Management
9500 Gilman Drive
La Jolla, CA 92093
United States
858-822-5933 (Phone)


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