Economics at your fingertips  

Individual-level loss aversion in riskless and risky choices

Simon Gächter (), Eric J. Johnson and Andreas Herrmann
Additional contact information
Eric J. Johnson: Columbia Business School
Andreas Herrmann: University of St. Gallen

Theory and Decision, 2022, vol. 92, issue 3, No 9, 599-624

Abstract: Abstract Loss aversion can occur in riskless and risky choices. We present novel evidence on both in a non-student sample (660 randomly selected customers of a car manufacturer). We measure loss aversion in riskless choice in endowment effect experiments within and between subjects and find similar levels of average loss aversion in both. The subjects of the within study also participate in a simple lottery choice task which arguably measures loss aversion in risky choices. We find substantial heterogeneity in both measures of loss aversion. Loss aversion in riskless choice and loss aversion in risky choice are strongly positively correlated, but on average riskless loss aversion is higher than risky loss aversion. We find that in both choice tasks, loss aversion increases in age, income, and wealth, and decreases in education. Our results provide novel supportive input to the debate about the reality of loss aversion.

Keywords: Loss aversion; Endowment effect; Reference-dependent preferences; Lab-in-the-field experiments (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link) Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Individual-level loss aversion in riskless and risky choices (2010) Downloads
Working Paper: Individual-Level Loss Aversion in Riskless and Risky Choices (2007) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from
http://www.springer. ... ry/journal/11238/PS2

DOI: 10.1007/s11238-021-09839-8

Access Statistics for this article

Theory and Decision is currently edited by Mohammed Abdellaoui

More articles in Theory and Decision from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

Page updated 2023-01-08
Handle: RePEc:kap:theord:v:92:y:2022:i:3:d:10.1007_s11238-021-09839-8