Wednesday, December 22, 2010

Loss Aversion Is an Affective Forecasting Error

ABSTRACT—Loss aversion occurs because people expect losses to have greater hedonic impact than gains of equal magnitude. In two studies, people predicted that losses in a gambling task would have greater hedonic impact than would gains of equal magnitude, but when people actually gambled, losses did not have as much of an emotional im- pact as they predicted. People overestimated the hedonic impact of losses because they underestimated their ten- dency to rationalize losses and overestimated their ten- dency to dwell on losses. The asymmetrical impact of losses and gains was thus more a property of affective forecasts than a property of affective experience.Loss Aversion Is an Affective Forecasting Error

Deborah A. Kermer, Erin Driver-Linn, Timothy D. Wilson and Daniel T. Gilbert Psychological Science 2006 17: 649

1 comment:

  1. Some studies have concluded that we are three times more motivated to avoid a loss than we are to make a gain.