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Updated: Mar 14, 2026
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Errors as a Means of Reducing Impulsive Food Choice
Published on: June 5, 2016
9.3K
Experience theory, or How desserts are like losses
Jolie M Martin1, Martin Reimann2, Michael I Norton3
1Pinterest.
Journal of Experimental Psychology. General
|September 30, 2016
Summary
People exhibit different risk preferences for experiences compared to money. We are more cautious with negative experiences but seek more risk for positive experiences, unlike typical financial decisions.
Area of Science:
- Decision science
- Behavioral economics
- Psychology
Background:
- Extensive research exists on risk preferences for monetary gambles.
- Limited systematic investigation into risk preferences for everyday experiences.
Purpose of the Study:
- To propose a conceptual model for understanding risk preferences in experiences.
- To empirically test how reference points influence choices for experiences versus money.
Main Methods:
- Seven experiments were conducted to elicit risk preferences.
- Participants made choices involving everyday positive and negative experiences.
- Elicitation methods varied to ensure robustness.
Main Results:
- Reference points for experiences are set at more extreme outcomes than for money.
- Concave utility functions were observed for negative experiences (risk aversion).
- Convex utility functions were observed for positive experiences (risk seeking).
Conclusions:
- Risk preferences for experiences differ significantly from those for monetary outcomes.
- People are risk-averse for negative experiences and risk-seeking for positive experiences.
- Findings are consistent across various elicitation techniques.
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