Regulatory focus effects on discounting over uncertainty for losses vs. gains

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From: Journal of Economic Psychology(Vol. 29, Issue 5)
Publisher: Elsevier B.V.
Document Type: Report
Length: 248 words

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Abstract :

To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.joep.2007.09.002 Byline: Vered Halamish (a), Nira Liberman (b), E. Tory Higgins (c), Lorraine Chen Idson (d) Keywords: Motivation; Decision making; Discounting over uncertainty; Regulatory focus; Promotion; Prevention; Loss aversion Abstract: 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. Author Affiliation: (a) Department of Psychology, University of Haifa, Israel (b) Department of Psychology, Tel Aviv University, Israel (c) Department of Psychology, Columbia University, United States (d) Harvard Business School, United States Article History: Received 26 February 2007; Revised 4 September 2007; Accepted 11 September 2007

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Gale Document Number: GALE|A187630027