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Do You Value What You Have More After Losing It? Extending the Break-Even Effect

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Online Research Seminar 3:00 pm, Friday, 3 June 2022 An explanation of the break-even effect (Thaler & Johnson, 1990) is that gains cancelling prior losses receive disproportionate higher values. This explanation is proposed and tested for monetary losses as well as lost property. In Experiment 1 (n=107) investigating choices of risky and sure hypothetical monetary outcomes after a prior loss, the results did not show that risk seeking increased when the risky gain cancelled the prior loss. After a reminder of the opportunity cost (what the lost money could have bought), an increase was observed of the frequency of choices of [...]