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Loss aversion is not supported by the evidence

blogs.scientificamerican.com

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Re: Loss aversion is not supported by the evidence

#3

Post by jadedhacker »

nyolfen wrote: post #2

psychology as a discipline is not looking so hot these days

I want to see what some other commentators who are more knowledgeable about the field say. This is a pretty striking attack against a central theory in... Scientific American? Without citing a wealth of evidence with detailed citations? I find the logic of the argument appealing, finding no inborn bias towards gain nor loss outside of what could be derived by reason would be a very nice thing to say about the future of humanity.

I read D. Kahneman's book Thinking Fast and Slow a number of years back and it did present some pretty clear looking graphs demonstrating loss aversion of 2:1 iirc. I've since lost my copy due to a friend's "borrowing". ;) Certain other elements of his book have come into question, including priming. I'm eagerly waiting to see how the cookie crumbles here.

Re: Loss aversion is not supported by the evidence

#4

Post by justamus »

jadedhacker wrote: post #3
nyolfen wrote: post #2

psychology as a discipline is not looking so hot these days

I want to see what some other commentators who are more knowledgeable about the field say. This is a pretty striking attack against a central theory in... Scientific American? Without citing a wealth of evidence with detailed citations? I find the logic of the argument appealing, finding no inborn bias towards gain nor loss outside of what could be derived by reason would be a very nice thing to say about the future…

I agree here. The article mentions ideological complacency, but complacency isn't enough to award 2 Nobel prizes. Loss aversion is, to my layman understanding, a well enough established principle that an article like this without some indication of widespread shift in expert opinion isn't going to change my view of it.

Re: Loss aversion is not supported by the evidence

#5

Post by everdev »

> People do not report their favorite sports team losing a game will be more impactful than their favorite sports team winning a game.

For fans of winning teams (Warriors, Patriots, etc.) I'm not sure if this is true. They're expected to win, so watching them win can feel like nervous relief or ambivalence but watching them lose can feel like disappointment.

I think we see loss aversion in soccer too where teams will often play "not to lose" and "park the bus" rather than risk pushing forward and trying to win the game but being vulnerable to counter attacks.

In video games however most seem to favor aggressive styles of play and loss aversion is likely an instant loss.

I'm sure as with most social behavior loss aversion varies and depends on a complex set of conditions. I'm sure in some contexts it's certainly at play though.

Re: Loss aversion is not supported by the evidence

#7

Post by btn »

This article is essentially a press release for the author's own paper: https://onlinelibrary.wiley.com/doi/abs/10.1002/jcpy.1047

Which itself is a part of a series of articles in JCP debating the issue: https://onlinelibrary.wiley.com/doi/abs/10.1002/jcpy.1054

The definitive statement made by this article's headline isn't really supported by the evidence presented in the papers. Rather, the state of affairs seems to be that "loss aversion" has been the victim of incessant overgeneralisation. It's a very simple hypothesis about human behaviour that plays nicely into a lot of interesting (and therefore publishable) narratives. This has lead people to blindly accept the general hypothesis of loss aversion without enough critical investigation of its manifestation. The authors don't really refute "loss aversion" (i.e. they don't present an alternative theory to explain the papers that purport to demonstrate "loss aversion"), but rather they refute the pop-psychology belief that it's a general principle of human behaviour.

Re: Loss aversion is not supported by the evidence

#8

Post by throwawaymath »

Hmm...

So here is an interesting thought experiment. Suppose you take a person with some appreciable intelligence (at least average) but no particular knowledge about a certain topic. In this instance, we'll let that topic be psycology.

Now we present this person with an unfortunate dilemma. For a particular hypothesis, they observe a significant amount of peer reviewed literature asserting empirical evidence in the affirmative. They don't have any real familiarity with any individual papers, but they can understand that there's an established consensus.

On the other hand they are given an article like this one, which mounts a critical refutation of all the established literature. Furthermore, this lone paper is presented to our stalwart examiner amidst the zeitgeist of a reproducibility crisis. Thus we have a mountain of peer reviewed but undigestible evidence on one side, and one readily digestible paper on the other which specifically rebuts the mountain of evidence.

The fundamental dilemma is this: how should this person examine the available evidence to maximize their chances of coming to the correct conclusion? Should they abstain from trying to discern the truth of the matter, and strike out any opinion they could have as unqualified? Should they read through the most comprehensive surveys of available evidence to come to a full understanding? Should they take the new, contrarian paper at face value?

There are a few dimensions here which (from my view) make the dilemma nearly intractable unless you 1) abstain from an opinion, or 2) become a subject matter expert. The cloud of the reproducibility crisis is a first dimension of uncertainty - not only does that muddy the waters for existig research, but we also have to be careful not take contradictory research at face value simply because it's contrarian. For another, we have to figure out how to weight the reliability of evidence against our own time. It's tempting to discount the evidence of existing research if an especially compelling critique is released, because we can more easily read it and follow its arguments.

It seems like this is enormously difficulty all around. How do we rate the critical correctness of differing amounts of conflicting literature published under academic uncertainty?

Re: Loss aversion is not supported by the evidence

#9

Post by dwaltrip »

btn wrote: post #7

This article is essentially a press release for the author's own paper: https://onlinelibrary.wiley.com/doi/abs/10.1002/jcpy.1047 Which itself is a part of a series of articles in JCP debating the issue: https://onlinelibrary.wiley.com/doi/abs/10.1002/jcpy.1054 The definitive statement made by this article's headline isn't really supported by the evidence presented in the papers. Rather, the state of affairs seems to…

Thanks for the phrase "incessant overgeneralization" -- I didn't even realize I was looking for that. It seems that this is something the social sciences are inherently at risk of, given how closely the topics are to our everday lives.
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