Judgment and Decision Making (Jul 2012)
Measurement-induced focusing and the magnitude of loss aversion: The difference between comparing gains to losses and losses to gains
Abstract
Research has identified loss aversion as a strong and robust phenomenon, but has also revealed some moderators affecting the magnitude of its effect on decision making. In the current article, we draw attention to the fact that even the measurement of loss aversion itself may affect its magnitude by inducing a focus on either losses or gains. In three studies, we provide empirical evidence for such a measurement-induced focus. In all studies we used coin-toss gambles---in which there is a 50/50 chance to win or to lose---to assess gain/loss ratios as a measure of loss aversion. Participants either filled out the loss side or the gain side of this gain/loss ratio. The studies consistently showed that---using within- and between-subject designs and anticipated and real coin-toss gambles---the strength of loss aversion depended on the measurement format (fill-in-the-loss versus fill-in-the-gain); filling in the loss side increased loss aversion. Moreover, loss aversion was more affected by the stakes of the gamble in the fill-in-the-loss format than in the fill-in-the-gain format.
