Year: 2023
Type: dissertation
Abstract: The field of decision-making is a dynamic and evolving area of study that has transformed significantly since its inception. In contrast to the classical economic perspectives that once characterized it, labeling cognitive biases as negative phenomena leading to irrational or erroneous decisions, contemporary approaches have taken a more nuanced and comprehensive approach. These modern perspectives are driven by a desire to not only understand the nature of cognitive biases but also to unearth the intricate factors that influence their expression. Moreover, these approaches delve into the role played by specific biases within diverse environmental contexts, recognizing that these biases can sometimes confer adaptive advantages in certain decision-making scenarios. In the following discussion, we will elaborate on these themes and explore the multifaceted nature of decision-making, with a particular focus on the prominent cognitive bias known as loss aversion. Loss aversion is a compelling phenomenon in the realm of decision-making, where individuals tend to place greater emphasis on avoiding losses than on acquiring equivalent gains. To gain deeper insights into this phenomenon, this thesis embarked on a rigorous investigative journey. Employing the PRISMA methodology, we conducted a systematic review, complemented by eight meticulously designed laboratory studies. Through this comprehensive research endeavor, we aimed to shed light on various facets of loss aversion and its intricate interplay within the broader landscape of decision-making. The first aspect we explored is the potential emotional origin of loss aversion. Understanding the emotional underpinnings of this bias is crucial, as emotions often play a pivotal role in shaping decision-making processes. Our research delved into the emotional dimensions of loss aversion and sought to unravel its origins. Additionally, we examined the influence of individual variables, such as interoception (the perception of internal bodily sensations) and alexithymia (a condition characterized by difficulty in recognizing and describing emotions), on the expression of loss aversion. By doing so, we aimed to provide a more comprehensive understanding of the psychological mechanisms at play. Another significant dimension of our research was the exploration of factors that modulate loss aversion. We recognized that external factors, including stressors, can exert a profound influence on decision-making biases. Our investigation considered the diverse array of stressors, whether acute or chronic, and examined their effects on loss aversion. Furthermore, we explored how stressors manifest in different phases—early or late—and their varying forms, whether physiological or emotional, to better grasp the intricate interplay between stress and decision-making. Intriguingly, our research unearthed evidence suggesting that loss aversion can have a beneficial role in various complex decision-making contexts. This bias may, in fact, facilitate reinforcement learning in ambiguous environments characterized by limited information. Additionally, loss aversion could provide adaptive responses within social domains, contributing to more favorable outcomes in interactions and negotiations. These findings emphasize the adaptability and contextual dependency of decision-making biases, aligning with the ecological rationality approach. The ecological rationality approach posits that the adaptive or maladaptive nature of a cognitive phenomenon should be evaluated in the specific context in which it operates. In other words, what may appear as an irrational bias in one setting could be a highly adaptive strategy in another. This perspective underscores the complexity of decision-making and highlights the need to transcend the confines of classical rationality derived from economics. In conclusion, the field of decision-making has evolved significantly, moving away from simplistic views of cognitive biases as purely negative aspects of decision processes. Through our research, we have contributed to this evolving landscape by delving into the multifaceted nature of loss aversion. Our systematic review and laboratory studies have provided valuable insights into the emotional origins, modulating factors, and adaptive roles of loss aversion in decision-making. By aligning with the ecological rationality approach, our work underscores the importance of considering the context in which decision-making occurs. Ultimately, this thesis advocates for a broader and more holistic exploration of decision-making that transcends classical economic paradigms and embraces the rich complexity of human judgment and choice.
Author: Molins Correa, Francisco Jose
Language: English
Subfield: General Decision Sciences
Field: Decision Sciences
Domain: Social Sciences
Open Access status: green
Awards: G1411154629, G2121780298, G2393297809
OpenAlex ID: W7052927000