Asymmetric perception of gains vs non-losses and losses vs non-gains: The causal role of regulatory focus

Simona Sacchi () and Luca Stanca

No 214, Working Papers from University of Milano-Bicocca, Department of Economics

Abstract: Recent studies show that, while losses loom larger than equivalent non-gains, gains loom larger than equivalent non-losses. This finding, at odds with the loss aversion principle, has been interpreted within the framework of regulatory focus theory. In this study, we explore the causal effect of regulatory focus on the asymmetric perception of gains vs non-losses and losses vs non-gains. We examine the perceived effects of both hypothetical and actual changes in monetary wealth, while orthogonally manipulating framing, valence, and regulatory focus. We find a significant interaction between the three factors. The gain vs non-loss asymmetry in perceived satisfaction is stronger in promotion focus, while the loss vs non-gain asymmetry in perceived dissatisfaction is stronger in prevention focus. The results suggest that the effects of incentives framed in terms of (non)gains and (non)losses, depend on their congruence with the individual’s motivational state.

Keywords: Loss-gain asymmetry; regulatory focus; prospect theory; subjective value (search for similar items in EconPapers)
JEL-codes: C91 D81 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2011-11, Revised 2011-11
New Economics Papers: this item is included in nep-cbe, nep-hrm and nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:mib:wpaper:214

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