It has been shown that in certain situations losses exert a stronger effect on behavior than respective gains, and this has been commonly explained by the argument that losses are given more weight in people's decisions than respective gains. However, although much is understood about the effect of losses on cognitive processes and behavior, 2 major inconsistencies remain. First, recent empirical evidence fails to demonstrate that people avoid incentive structures that carry equivalent gains and losses. Second, findings in experience-based decision tasks indicate that following losses, increased arousal is observed simultaneously with no behavioral loss aversion. To account for these findings, we developed an attention-allocation model as a comprehensive framework for the effect of losses. According to this model losses increase on-task attention, thereby enhancing the sensitivity to the reinforcement structure. In the current article we examine whether this model can account for a broad range of empirical phenomena involving losses. We show that as predicted by the attentional model, asymmetric effects of losses on behavior emerge where gains and losses are presented separately but not concurrently. Yet, even in the absence of loss aversion, losses have distinct effects on performance, arousal, frontal cortical activation, and behavioral consistency. The attentional model of losses thus explains some of the main inconsistencies in previous studies of the effect of losses.

Findings from a complex decision-making task (the Iowa gambling task) show that individuals with neuropsychological disorders are characterized by decision-making deficits that lead to maladaptive risk-taking behavior. This article describes a cognitive model that distills performance in this task into three different underlying psychological components: the relative impact of rewards and punishments on evaluations of options, the rate that the contingent payoffs are learned, and the consistency between learning and responding. Findings from 10 studies are organized by distilling the observed decision deficits into the three basic components and locating the neuropsychological disorders in this component space. The results reveal a cluster of populations characterized by making risky choices despite high attention to losses, perhaps because of difficulties in creating emotive representations. These findings demonstrate the potential contribution of cognitive models in building bridges between neuroscience and behavior.

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Background: We reviewed previous studies comparing schizophrenia patients and healthy subjects for performance on the Iowa Gambling Task (IGT) (a laboratory task designed to measure emotionbased decision-making), and found mixed results. We hypothesize that deficits in IGT performance in schizophrenia may be more specifically related to concurrent substance use disorders. To test this hypothesis, we compared schizophrenia patients with (SCZ (+) ) or without (SCZ (−) ) cannabis use disorders, to healthy subjects, on measures of cognition and IGT performance. Methods:A comprehensive battery of cognitive tests and the IGT were administered to three groups of subjects: (1) 13 subjects with DSM-IV diagnosis of schizophrenia and no concurrent substance use disorders (mean age: 28 ± 12 (SD); 54% males); (2) 14 subjects with schizophrenia and concurrent cannabis use disorders (mean age: 29 ± 9 (SD); 71% males); and (3) 20 healthy subjects (mean age 33 ± 10 (SD); 60% males).Results: Compared to the healthy group, both schizophrenia groups were cognitively more impaired, and did worse on IGT performance. There were no differences between SCZ (+) and SCZ (−) patients on most of the cognitive tests, and IGT performance. Conclusions:Schizophrenia patients show widespread impairments in several cognitive domains and emotion-based decision-making. These results are consistent with the evidence that schizophrenia reflects a dorsolateral and orbitofrontal/ventromedial prefrontal cortex dysfunction. More intriguing, it appears that the concurrent abuse of cannabis has no compounding effects on cognition, as well as emotion/affect-based decision-making.

Three experiments are presented that explore the assertion that loss aversion and diminishing sensitivity drive the effect of experience on choice behavior. The experiments are focused on repeated choice tasks where decision makers choose repeatedly between alternatives and get feedback after each choice. Experiments 1a and 1b show that behavioral tendencies that were previously interpreted as indications of loss aversion in decisions from experience are better described as products of diminishing sensitivity to absolute payoffs. Experiment 2 highlights a nominal magnitude effect: A decrease in the magnitude of the nominal payoffs eliminates the evidence for diminishing sensitivity. These and related previous results can be captured with a model that assumes reliance on small samples of subjective experiences, and an increase in diminishing sensitivity with payoff variability.