Loss averse behavior

Peter Brooks, Horst Zank

Research output: Contribution to journalArticlepeer-review


A behavioral condition of loss aversion is proposed and tested. Forty-nine students participated in experiments on binary choices among lotteries involving small scale real gains and losses. At the aggregate level, a significant proportion of the choices are in the direction predicted by loss aversion. Individuals can be classified as loss averse (28 participants), gain seeking (12), and unclassified (9). A comparison with risk behavior for binary choices on lotteries involving only gains shows that risk attitudes vary across these domains of lotteries. A gender effect is also observed: proportionally more women are loss averse. In contrast to the predictions of comonotonic independence, the size of common outcomes has systematic influence on choice behavior. © 2005 Springer Science + Business Media, Inc.
Original languageEnglish
Pages (from-to)301-325
Number of pages24
JournalJournal of Risk and Uncertainty
Issue number3
Publication statusPublished - Dec 2005


  • Binary choice
  • Comonotonic independence
  • Gender effect
  • Loss aversion
  • Risk aversion


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