Individual differences in loss aversion and preferences for skewed risks across adulthood.

Area of Science:

• Cognitive Psychology
• Decision Neuroscience
• Behavioral Economics

Background:

• Previous research identified an age-related positive-skew bias in gamble acceptance.
• This bias involves a preference for positively skewed gambles (small chance of large win) over equivalent risks.

Purpose of the Study:

• To investigate if loss aversion underlies the observed age-related positive-skew bias.
• To examine the relationship between loss aversion, skew preference, and age.

Main Methods:

• 508 healthy participants (ages 21-82) completed questionnaires assessing loss aversion and skew preference.
• Statistical analyses were used to determine the relationships between age, loss aversion, and gamble acceptance.

Main Results:

• Age was not significantly related to loss aversion.
• Loss aversion predicted gamble acceptance but did not mediate the age-related positive-skew bias.
• The positive-skew bias persisted independently of loss aversion levels.

Conclusions:

• Loss aversion does not explain the age-related positive-skew bias in decision-making.
• The findings suggest other psychological mechanisms contribute to age differences in risk preference.
• Understanding these biases is crucial for comprehending adult decision-making across the lifespan.