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Self–other decision making and loss aversion

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  • Polman, Evan
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    Abstract

    In 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).

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    Bibliographic Info

    Article provided by Elsevier in its journal Organizational Behavior and Human Decision Processes.

    Volume (Year): 119 (2012)
    Issue (Month): 2 ()
    Pages: 141-150

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    Handle: RePEc:eee:jobhdp:v:119:y:2012:i:2:p:141-150

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    Web page: http://www.elsevier.com/locate/obhdp

    Related research

    Keywords: Self–other decision making; Loss aversion; Construal level; Regulatory focus; Information seeking; Omission bias; Power;

    References

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    Cited by:
    1. 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.
    2. 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.
    3. 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.

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