Bipolar Scales Mask Loss Aversion

A. Peter McGraw, University of Colorado, Boulder
Jeff T. Larsen, Texas Tech University
Daniel Kahneman, Princeton University
David Schkade, University of California, San Diego
Loss aversion in choices is commonly assumed to arise from the anticipation that losses will have a greater effect on feelings than equivalent gains. But evidence for loss aversion in feelings has been equivocal. We contend that loss aversion is masked in bipolar scales, because people rate opposite-valence outcomes separately on the positive and negative portions of the scale such that positive and negative outcomes are not compared directly. We show that when people comparatively judge their feelings about positive and negative outcomes using the same category units of intensity, loss aversion emerges and predicts risky choice.
[ to cite ]:
A. Peter McGraw, Jeff T. Larsen, Daniel Kahneman, and David Schkade (2008) ,"Bipolar Scales Mask Loss Aversion", in NA - Advances in Consumer Research Volume 35, eds. Angela Y. Lee and Dilip Soman, Duluth, MN : Association for Consumer Research, Pages: 707-709.