scholarly journals Toward an Understanding of the Welfare Effects of Nudges: Evidence from a Field Experiment in the Workplace

2020 ◽  
Vol 130 (632) ◽  
pp. 2329-2353
Author(s):  
Erwin Bulte ◽  
John A List ◽  
Daan van Soest
Keyword(s):  
Field Experiment ◽  
Loss Aversion ◽  
Welfare Effects ◽  
Social Scientists ◽  
Welfare Costs ◽  
Gains And Losses ◽  
Commitment Device

Abstract Social scientists have recently explored how framing of gains and losses affects productivity. We conducted a field experiment in peri-urban Uganda, and compared output levels across 1,000 workers over isomorphic tasks and incentives, framed as either losses or gains. We find that loss aversion can be leveraged to increase the productivity of labour. The estimated welfare costs of using the loss contract are quite modest—perhaps because the loss contract is viewed as a (soft) commitment device.

scholarly journals A regret-based route choice model with asymmetric preference in a stochastic network

2018 ◽  
Vol 10 (8) ◽  
pp. 168781401879323
Author(s):  
Lei Zhao ◽  
Hongzhi Guan ◽  
Xinjie Zhang ◽  
Xiongbin Wu
Keyword(s):  
Loss Aversion ◽  
Equilibrium Model ◽  
Choice Model ◽  
User Equilibrium ◽  
Stochastic User Equilibrium ◽  
Regret Minimization ◽  
Route Network ◽  
Travel Decision ◽  
Gains And Losses ◽  
Random Regret Minimization

In this study, a stochastic user equilibrium model on the modified random regret minimization is proposed by incorporating the asymmetric preference for gains and losses to describe its effects on the regret degree of travelers. Travelers are considered to be capable of perceiving the gains and losses of attributes separately when comparing between the alternatives. Compared to the stochastic user equilibrium model on the random regret minimization model, the potential difference of emotion experienced induced by the loss and gain in the equal size is jointly caused by the taste parameter and loss aversion of travelers in the proposed model. And travelers always tend to use the routes with the minimum perceived regret in the travel decision processes. In addition, the variational inequality problem of the stochastic user equilibrium model on the modified random regret minimization model is given, and the characteristics of its solution are discussed. A route-based solution algorithm is used to resolve the problem. Numerical results given by a three-route network show that the loss aversion produces a great impact on travelers’ choice decisions and the model can more flexibly capture the choice behavior than the existing models.

scholarly journals Loss Aversion: Will It Be Greater than the Gain?

2020 ◽  
Vol 9 (2) ◽  
pp. 71
Author(s):  
Hongren Zhao
Keyword(s):  
Social Science ◽  
Loss Aversion ◽  
General Principle ◽  
Consumer Psychology ◽  
Current Evidence ◽  
Relative Impact ◽  
Social Scientists ◽  
The Third

<p>Loss aversion is one of the most widely accepted ideas in social science, that is, the loss is greater than the gain. This paper is divided into four parts. First of all, the construction of loss aversion is introduced and discussed. The second part is about the evidence that supports loss aversion. As a result, the current evidence does not support losses, which are generally more influential than gains. The third part is to solve the following questions: despite the evidence to the contrary, why aversion is still generally accepted as a general principle among social scientists, including consumer psychologists. The aim of the analysis is to link beliefs about loss aversion to more general concepts, such as acceptance and adherence to scientific beliefs. In the last part, how to understand the relative impact of loss and income from the context, and how to broaden the new field of investigation in the field of consumer psychology are discussed.</p>

scholarly journals Soft Commitments, Reminders, and Academic Performance

2019 ◽  
Vol 11 (2) ◽  
pp. 114-142 ◽  
Author(s):  
Oliver Himmler ◽  
Robert Jäckle ◽  
Philipp Weinschenk
Keyword(s):  
Academic Performance ◽  
Field Experiment ◽  
Complex Tasks ◽  
Change Behavior ◽  
Reminder Treatment ◽  
Commitment Device

We provide first evidence that a soft commitment device enhances progress in education and, more generally, improves the completion of complex tasks—such as passing exams. In our field experiment, students can sign a nonbinding agreement and commit to staying on track for graduation. We find that those who were offered the soft commitment device are more likely to sign up for, take part in, and pass exams. A pure reminder treatment does not change behavior, which suggests that the effects are not driven by increased salience. We also show that procrastinators benefit most from the commitment device. (JEL C93, D12, D91, I23)

scholarly journals Gain-Loss Asymmetry in Delay and Effort Discounting of Different Amounts

2021 ◽  
Author(s):  
Szymon Bartłomiej Mizak ◽  
Paweł Ostaszewski ◽  
Przemysław Marcowski ◽  
Wojciech Białaszek
Keyword(s):  
Delay Discounting ◽  
Loss Aversion ◽  
Cognitive Effort ◽  
Physical Effort ◽  
P Loss ◽  
Effort Discounting ◽  
Gain Loss ◽  
Gains And Losses ◽  
Intertemporal Choices

Loss aversion entails the attribution of greater weight to losses than to equivalent gains. In terms of discounting, it is reflected in a higher rate for gains than for losses. Research on delay discounting indicates that such gain-loss asymmetry may depend on the amount of the outcome. In the current study, we address the question of how gains and losses are discounted in delay or effort conditions (physical or cognitive) across four outcome amounts. Our results replicate previous findings for intertemporal choices by showing that losses are discounted more slowly than gains, but only for smaller amounts, while there is no evidence of asymmetry in the evaluation for larger amounts. For physical effort discounting, we found an inverse asymmetry for the smallest amount tested (gains are discounted less steeply than losses), while such an effect is absent for larger amounts. Our results provide no support for the asymmetric evaluation of gains and losses for cognitive effort. Overall, our findings indicate that loss aversion may not be as pervasive as one might expect, at least when decisions are effort-based.

scholarly journals Loss aversion does disappear and reverse, although estimates of lambda (λ) are not reliable: Reply to André and De Langhe

2020 ◽  
Author(s):  
Lukasz Walasek ◽  
Timothy L Mullett ◽  
Neil Stewart
Keyword(s):  
Prospect Theory ◽  
Measurement Invariance ◽  
Loss Aversion ◽  
Choice Data ◽  
General Issue ◽  
Choice Proportion ◽  
Choice Sets ◽  
The Common ◽  
Gains And Losses

Walasek and Stewart (2015) demonstrated that loss aversion estimated from fitting accept-reject choice data from a set of 50/50 gambles can be made to disappear or even reverse by manipulating the range of gains and losses experienced in different conditions. André and de Langhe (2020) critique this conclusion because in estimating loss aversion on different choice sets, Walasek and Stewart (2015) have violated measurement invariance. They show, and we agree, that when loss aversion is estimated on the choices common to all conditions there is no difference in prospect theory’s λ parameter. But there are two problems here. First, while there are no differences in λs across conditions, there are very large differences in the proportion of the common gambles that are accepted, which André and de Langhe chose not to report. These choice proportion differences are consistent with decision by sampling (but are inconsistent with prospect theory or any of the alternative mechanisms proposed by André and de Langhe, 2020). Second, we demonstrate a much more general issue related to the issue of measurement invariance: that λ estimated from the accept-reject choices is extremely unreliable and does not generalise even across random splits within large, balanced choice sets. It is therefore not possible to determine whether differences in choice proportions are due to loss aversion or to a bias in accepting or rejecting mixed gambles. We conclude that context has large effects on the acceptance of mixed gambles and that it is futile to estimate λ from accept-reject choices.

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