Author: Yu, Xinhao
Title: Loss helps people make more rational decisions
Advisors: Savani, Krishna (MM)
Ou, Yi Amy (MM)
Degree: M.Phil.
Year: 2024
Department: Department of Management and Marketing
Pages: 43 pages : color illustrations
Language: English
Abstract: Biases often arise when people make choices and evaluate outcomes, leading them astray from optimal decision-making based on economic theories. Although researchers have proposed cognitive and motivational interventions to de-bias people, few interventions can address multiple biases simultaneously. This research aims to achieve this goal by examining people’s tendencies to exhibit or avoid decision-making biases after they experience losses or gains. I argue that people experiencing losses tend to avoid certain decision-making biases as they become more cautious or process information more deliberately. Three experiments tested the effects of experienced losses on the three most prevalent biases when people make and reflect on decisions (sunk cost bias, default bias, and outcome bias). The results indicated that a loss manipulation significantly reduced the three biases, with effect sizes approximately halving compared to a gain manipulation. These findings are consistent with the idea that losses promote more analytical thinking that helps people make more rational decisions.
Rights: All rights reserved
Access: open access

Files in This Item:
File Description SizeFormat 
7664.pdfFor All Users365.4 kBAdobe PDFView/Open


Copyright Undertaking

As a bona fide Library user, I declare that:

  1. I will abide by the rules and legal ordinances governing copyright regarding the use of the Database.
  2. I will use the Database for the purpose of my research or private study only and not for circulation or further reproduction or any other purpose.
  3. I agree to indemnify and hold the University harmless from and against any loss, damage, cost, liability or expenses arising from copyright infringement or unauthorized usage.

By downloading any item(s) listed above, you acknowledge that you have read and understood the copyright undertaking as stated above, and agree to be bound by all of its terms.

Show full item record

Please use this identifier to cite or link to this item: https://theses.lib.polyu.edu.hk/handle/200/13211