Motivation and affective processing biases in risky decision making: A counter-regulation account

Susanne Schwager and Klaus Rothermund

Journal of Economic Psychology, 2013, vol. 38, issue C, 111-126

Abstract: We hypothesized that framing possible outcomes of decisions in terms of gains vs. losses should increase the salience of information that is incongruent in valence (counter-regulation principle: gain frame – negativity bias, loss frame – positivity bias). These incongruent attentional biases in the processing of positive and negative outcomes of risky options can explain why people tend to avoid risky options in a gain frame but tend to choose risky options in a loss frame. In line with our expectations, Experiment 1 revealed incongruent effects of framing on attentional biases for positive vs. negative stimuli in an evaluation task. In addition, valence bias predicted risk-seeking vs. risk-averse decisions and mediated the effect of framing on decision making. Two additional experiments investigated effects of valence biases on risky decision making by manipulating affective processing directly with an attention training task. Inducing a positivity (negativity) bias produced risk-seeking (risk-averse) decision behavior by enhancing the salience of win- or loss-related information in a gambling task with ambivalent color stimuli (Experiment 2) and by enhancing the impact of gain or loss outcomes on decision making in a coin toss (Experiment 3).

Keywords: 2300; 2340; 2346; 2360; Framing effect; Risk; Counter-regulation; Valence bias; Prospect theory; Regulatory focus theory; Query theory (search for similar items in EconPapers)
JEL-codes: D D8 D81 D83 D87 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:joepsy:v:38:y:2013:i:c:p:111-126

DOI: 10.1016/j.joep.2012.08.005

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