Myopic Loss Aversion (MLA) is one of the study objects of behavioral economics. It corresponds to the fact that participants, when facing choice situations, cannot rationally evaluate the risks and profits of available options, leading them to choose investments more likely to occur but less profitable. This behavior shows that they cannot evaluate the options satisfactorily, so they have sub-optimal decisions. There may be conditions for MLA more favorable for it to occur, as the frequency one shows the participant the outcomes of their choices (feedback) and the probability of winning or losing. In this way, this study aims to evaluate how feedback influences participants' choices and the influence and interaction of the winning and losing probability. This study had the participation of 80 people, ages 18 to 30 years, all university students, 29 women and 51 men, without either relation to business degree courses or familiarity with the research area on economic behavior. The experiment consisted in making nine repeated choices in a lottery game. Participants started the experiment with R$1000 (a thousand) fictitious reais (Brazilian currency); each lottery game had a cost of 150 reais, and the profits returned this invested value with an addition of more 150 reais. The results indicate that the presence of feedback induces participants to bet more. However, the winning and losing probability do not influence the invested amount, and there was no interaction between these two factors.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
customersupport@researchsolutions.com
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
Copyright © 2024 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.