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Loss aversion fails to replicate in the coronavirus pandemic: Evidence from an online experiment

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  • Sanders, Michael
  • Stockdale, Emma
  • Hume, Susannah
  • John, Peter

Abstract

Loss aversion is a foundational bias and is a natural choice for interventions encouraging compliance during COVID-19. We compare the effectiveness of loss and gain messages and find no difference in the intention to comply with guidance or lockdown beliefs.

Suggested Citation

  • Sanders, Michael & Stockdale, Emma & Hume, Susannah & John, Peter, 2021. "Loss aversion fails to replicate in the coronavirus pandemic: Evidence from an online experiment," Economics Letters, Elsevier, vol. 199(C).
    • Handle: RePEc:eee:ecolet:v:199:y:2021:i:c:s0165176520302706
    DOI: 10.1016/j.econlet.2020.109433
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    References listed on IDEAS

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    1. Adams-Prassl, A. & Boneva, T. & Golin, M & Rauh, C., 2020. "The Impact of the Coronavirus Lockdown on Mental Health: Evidence from the US," Cambridge Working Papers in Economics 2037, Faculty of Economics, University of Cambridge.
    2. Michael S. Haigh & John A. List, 2005. "Do Professional Traders Exhibit Myopic Loss Aversion? An Experimental Analysis," Journal of Finance, American Finance Association, vol. 60(1), pages 523-534, February.
    3. Layard, Richard & Clark, Andrew E. & De Neve, Jan-Emmanuel & Krekel, Christian & Fancourt, Daisy & Hey, Nancy & O'Donnell, Gus, 2020. "When to release the lockdown: a wellbeing framework for analysing costs and benefits," LSE Research Online Documents on Economics 104276, London School of Economics and Political Science, LSE Library.
    4. Hallsworth, Michael & List, John A. & Metcalfe, Robert D. & Vlaev, Ivo, 2017. "The behavioralist as tax collector: Using natural field experiments to enhance tax compliance," Journal of Public Economics, Elsevier, vol. 148(C), pages 14-31.
    5. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    6. Manel Baucells & Martin Weber & Frank Welfens, 2011. "Reference-Point Formation and Updating," Management Science, INFORMS, vol. 57(3), pages 506-519, March.
    7. repec:cup:judgdm:v:12:y:2017:i:1:p:81-89 is not listed on IDEAS
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    Citations

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    Cited by:

    1. Talia Goren & Itai Beeri & Dana R. Vashdi, 2023. "Framing policies to mobilize citizens' behavior during a crisis: Examining the effects of positive and negative vaccination incentivizing policies," Regulation & Governance, John Wiley & Sons, vol. 17(2), pages 570-591, April.
    2. Amy M. Wolaver & John A. Doces, 2021. "The impact of COVID‐19 and political identification on framing bias in an infectious disease experiment: The frame reigns supreme," Social Science Quarterly, Southwestern Social Science Association, vol. 102(6), pages 2459-2471, November.

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    More about this item

    Keywords

    Loss aversion; COVID-19; Framing; Prospect theory; Behavioural;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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