Loss Aversion in Social Image Concerns

Vasilisa Petrishcheva (), Gerhard Riener and Hannah Schildberg-Hörisch ()
Additional contact information
Vasilisa Petrishcheva: Heinrich Heine University Düsseldorf
Hannah Schildberg-Hörisch: Max Planck Institute for Research on Collective Goods
Authors registered in the RePEc Author Service: Hannah Schildberg-Hoerisch ()

No 13896, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper explores whether loss aversion applies to social image concerns. In a simple model, we combine loss aversion in social image concerns and attitudes towards lying. We then test its predictions in a laboratory experiment. Subjects are first ranked publicly in a social image relevant domain, intelligence. This initial rank serves as within-subject reference point. After inducing an exogenous change in subjects' rank across treatments, subjects are offered scope for lying to improve their final rank. We find evidence for loss aversion in social image concerns. Subjects who face a loss in social image lie more than those experiencing gains if they sufficiently care about social image and have a reputation to lose. Individual-level analyses document a discontinuity in lying behavior when moving from rank losses to gains, indicating a kink in the value function for social image.

Keywords: loss aversion; social image concerns; lying behavior; laboratory experiment (search for similar items in EconPapers)
JEL-codes: C91 D91 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2020-11
New Economics Papers: this item is included in nep-exp and nep-upt
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Published - published in: Experimental Economics, 2023, 26, 622–645.

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Related works:
Working Paper: Loss aversion in social image concerns (2020)
Working Paper: Loss aversion in social image concerns (2020)
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