Attention all users - Due to a recent spike in spam activities, we have increased our measures to flag spam content on OSF. Contact email@example.com if you believe your content has been flagged in error.
People occasionally face sure loss prospects. Do they seek risk in search of better outcomes or contend with the sure loss and focus on what is left to be saved? We addressed this question in three experiments akin to a negative interest rate framework. Specifically, we asked participants to allocate money (Experiments 1 and 2) or choose (Experiment 3) between two options: i) a loss option where, for sure, they would end up with less, or ii) a mixed gamble with a positive expected outcome, but also the possibility of an even larger loss. Risk aversion (i.e., choosing the sure loss) ranged from 80% to 36% across the three experiments, dependent on varied sizes of sure losses or expected outcomes. However, overall, the majority (more than 50%) of allocations and choices were for the sure loss. Our findings indicate a tolerance for sure losses at the expense of mixed gambles yielding much better expected outcomes. We discuss the implications of this sure-loss tolerance for psychological research, its implications in terms of (cumulative) prospect theory, and what the results mean for the implementation of negative interest rates.
OSF does not support the use of Internet Explorer. For optimal performance, please switch to another browser.
This website relies on cookies to help provide a better user experience. By clicking Accept or continuing to use the site, you agree. For more information,
and information on cookie use.