Saturday, August 11, 2018
Why the Most Important Idea in Behavioral Decision-Making Is a Fallacy - Scientific American Blog Network
However, as documented in a recent critical review of loss aversion by Derek Rucker of Northwestern University and myself, published in the Journal of Consumer Psychology, loss aversion is essentially a fallacy. That is, there is no general cognitive bias that leads people to avoid losses more vigorously than to pursue gains. Contrary to claims based on loss aversion, price increases (ie, losses for consumers) do not impact consumer behavior more than price decreases (ie, gains for consumers). Messages that frame an appeal in terms of a loss (eg, “you will lose out by not buying our product”) are no more persuasive than messages that frame an appeal in terms of a gain (eg, “you will gain by buying our product”).