The Neural Basis of Loss Aversion in Decision-Making Under Risk

Craig Fox, University of California, Los Angeles
Sabrina Tom, University of California, Los Angeles
Christopher Trepel, University of California, Los Angeles
Russel Poldrack, University of California, Los Angeles
People typically exhibit greater sensitivity to losses than to equivalent gains when making decisions. We used fMRI to investigate neural correlates of loss aversion while individuals decided whether to accept or reject gambles that offered a 50/50 chance of gaining or losing money. A broad set of areas (including midbrain dopaminergic regions and their targets) showed increasing activity as potential gains increased. Potential losses were represented by decreasing activity in several of these same gain-sensitive areas. Finally, individual differences in behavioral loss aversion were predicted by a measure of neural loss aversion in several regions including striatum and prefrontal cortex.
[ to cite ]:
Craig Fox, Sabrina Tom, Christopher Trepel, and Russel Poldrack (2008) ,"The Neural Basis of Loss Aversion in Decision-Making Under Risk", in NA - Advances in Consumer Research Volume 35, eds. Angela Y. Lee and Dilip Soman, Duluth, MN : Association for Consumer Research, Pages: 129-132.