Self–other decision making and loss aversion
AbstractIn eight studies, we tested the prediction that making choices for others involves less loss aversion than making choices for the self. We found that loss aversion is significantly lessened among people choosing for others in scenarios describing riskless choice (Study 1), gambling (Studies 2 and 3), and social aspects of life, such as likeably and status (Studies 4a–e). Moreover, we found this pattern in relatively realistic conditions where people are rewarded for making desirable (i.e., profitable) choices for others (Study 2), when the other for whom a choice is made is physically present (Study 3), and when real money is at stake (Studies 2 and 3). Finally, we found loss aversion is moderated when factors associated with self–other differences in decision making are taken into account, such as decision makers’ construal level (Study 4a), regulatory focus (Study 4b), degree of information seeking (Study 4c), omission bias (Study 4d), and power (Study 4e).
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Organizational Behavior and Human Decision Processes.
Volume (Year): 119 (2012)
Issue (Month): 2 ()
Contact details of provider:
Web page: http://www.elsevier.com/locate/obhdp
Self–other decision making; Loss aversion; Construal level; Regulatory focus; Information seeking; Omission bias; Power;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gabriele Paolacci & Jesse Chandler & Panagiotis G. Ipeirotis, 2010. "Running experiments on Amazon Mechanical Turk," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 5(5), pages 411-419, August.
- Kray, Laura J., 2000. "Contingent Weighting in Self-Other Decision Making," Organizational Behavior and Human Decision Processes, Elsevier, vol. 83(1), pages 82-106, September.
- Simona Botti & Ann L. McGill, 2011. "The Locus of Choice: Personal Causality and Satisfaction with Hedonic and Utilitarian Decisions," Journal of Consumer Research, University of Chicago Press, vol. 37(6), pages 1065 - 1078.
- Ritov, Ilana & Baron, Jonathan, 1992. " Status-Quo and Omission Biases," Journal of Risk and Uncertainty, Springer, vol. 5(1), pages 49-61, February.
- Cole, Catherine A & Balasubramanian, Siva K, 1993. " Age Differences in Consumers' Search for Information: Public Policy Implications," Journal of Consumer Research, University of Chicago Press, vol. 20(1), pages 157-69, June.
- Alok Kumar & Sonya Seongyeon Lim, 2008. "How Do Decision Frames Influence the Stock Investment Choices of Individual Investors?," Management Science, INFORMS, vol. 54(6), pages 1052-1064, June.
- Tversky, Amos & Kahneman, Daniel, 1991. "Loss Aversion in Riskless Choice: A Reference-Dependent Model," The Quarterly Journal of Economics, MIT Press, vol. 106(4), pages 1039-61, November.
- Linda Lai, 2010. "Maximizing without difficulty: A modified maximizing scale and its correlates," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 5(3), pages 164-175, June.
- Andrew D. Gershoff & Jonathan J. Koehler, 2011. "Safety First? The Role of Emotion in Safety Product Betrayal Aversion," Journal of Consumer Research, University of Chicago Press, vol. 38(1), pages 140 - 150.
- Baron, Jonathan & Ritov, Ilana, 1994. "Reference Points and Omission Bias," Organizational Behavior and Human Decision Processes, Elsevier, vol. 59(3), pages 475-498, September.
- Burson, Katherine A. & Faro, David & Rottenstreich, Yuval, 2010. "ABCs of principal-agent interactions: Accurate predictions, biased processes, and contrasts between working and delegating," Organizational Behavior and Human Decision Processes, Elsevier, vol. 113(1), pages 1-12, September.
- Terrance Odean, 1999. "Do Investors Trade Too Much?," American Economic Review, American Economic Association, vol. 89(5), pages 1279-1298, December.
- William Harbaugh & Kate Krause & Lise Vesterlund, 2002.
"Risk Attitudes of Children and Adults: Choices Over Small and Large Probability Gains and Losses,"
Springer, vol. 5(1), pages 53-84, June.
- William T. Harbaugh & Kate Krause & Lise Vesterlund, 1999. "Risk attitudes of children and adults: choices over small and large probability gains and losses," University of Oregon Economics Department Working Papers 1999-2, University of Oregon Economics Department.
- Jonas, Eva & Frey, Dieter, 2003. "Information search and presentation in advisor-client interactions," Organizational Behavior and Human Decision Processes, Elsevier, vol. 91(2), pages 154-168, July.
- Richard H. Thaler & Eric J. Johnson, 1990. "Gambling with the House Money and Trying to Break Even: The Effects of Prior Outcomes on Risky Choice," Management Science, INFORMS, vol. 36(6), pages 643-660, June.
- David Faro & Yuval Rottenstreich, 2006. "Affect, Empathy, and Regressive Mispredictions of Others' Preferences Under Risk," Management Science, INFORMS, vol. 52(4), pages 529-541, April.
- Inesi, M. Ena, 2010. "Power and loss aversion," Organizational Behavior and Human Decision Processes, Elsevier, vol. 112(1), pages 58-69, May.
- Jinhee Choi & B. Kyu Kim & Incheol Choi & Youjae Yi, 2006. "Variety-Seeking Tendency in Choice for Others: Interpersonal and Intrapersonal Causes," Journal of Consumer Research, University of Chicago Press, vol. 32(4), pages 590-595, 03.
- Cassie Mogilner & Jennifer L. Aaker & Ginger L. Pennington, 2008. "Time Will Tell: The Distant Appeal of Promotion and Imminent Appeal of Prevention," Journal of Consumer Research, University of Chicago Press, vol. 34(5), pages 670-681, 08.
- Juliano Laran, 2010. "Goal Management in Sequential Choices: Consumer Choices for Others Are More Indulgent than Personal Choices," Journal of Consumer Research, University of Chicago Press, vol. 37(2), pages 304-314, 08.
- Daniel Kahneman & Jack L. Knetsch & Richard H. Thaler, 1991. "Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 193-206, Winter.
- Crowe, Ellen & Higgins, E. Tory, 1997. "Regulatory Focus and Strategic Inclinations: Promotion and Prevention in Decision-Making," Organizational Behavior and Human Decision Processes, Elsevier, vol. 69(2), pages 117-132, February.
- William Harbaugh & Kate Krause & Lise Vesterlund, 2002. "Risk attitudes of children and adults: Choices over small and large probability gains and losses," Artefactual Field Experiments 00055, The Field Experiments Website.
- M. Keith Chen & Venkat Lakshminarayanan & Laurie R. Santos, 2006. "How Basic Are Behavioral Biases? Evidence from Capuchin Monkey Trading Behavior," Journal of Political Economy, University of Chicago Press, vol. 114(3), pages 517-537, June.
- Pollmann, Monique M.H. & Potters, Jan & Trautmann, Stefan T., 2014. "Risk taking by agents: The role of ex-ante and ex-post accountability," Economics Letters, Elsevier, vol. 123(3), pages 387-390.
- Liu, Peggy J. & Campbell, Troy H. & Fitzsimons, Gavan J. & Fitzsimons, Gráinne M., 2013. "Matching choices to avoid offending stigmatized group members," Organizational Behavior and Human Decision Processes, Elsevier, vol. 122(2), pages 291-304.
- Lu, Jingyi & Xie, Xiaofei, 2014. "To change or not to change: A matter of decision maker’s role," Organizational Behavior and Human Decision Processes, Elsevier, vol. 124(1), pages 47-55.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.