Prospect theory [Tversky, A., & Kahneman, D. (1992). Advances in prospect theory: Cumulative representation of uncertainty. Journal of Risk and Uncertainty, 5, 297-323] proposes that uncertainty reduces the perceived intensity of losses slightly less than it reduces the perceived intensity of gains. We examined whether this difference would be more pronounced for prevention focus concerns with obligations (oughts) and security than for promotion focus concerns with aspirations (ideals) and advancement. Study 1 manipulated regulatory focus and Studies 2 and 3 assessed individual differences in chronic regulatory focus. The studies applied a psychophysical method to examine discounting over uncertainty. Studies 1 and 2 examined hedonic intensity of pleasure of anticipating gains and pain of anticipating losses. Study 3 examined motivational intensity to approach gains or to avoid losses. All three studies found that in a prevention focus, more than in a promotion focus, negative prospects were discounted over uncertainty more than positive prospects. We discuss the relevance of motivation to positive/negative asymmetries.
|Number of pages||13|
|Journal||Journal of Economic Psychology|
|State||Published - Nov 2008|
Bibliographical noteFunding Information:
This research was supported by Grant 1346-04 from the Israeli Science Foundation to Nira Liberman.
- Decision making
- Discounting over uncertainty
- Loss aversion
- Regulatory focus