An agent is loss-averse if the absolute value of loosing X (say, $100) is higher than the absolute value of gaining X: if loosing $100 "hurts more" than receiving it feels good. This bias is a robust finding in psychology. A new paper in Developmental Science indicates that loss-aversion unfolds, in the lifetime in three different stages. Children, adolescent and adults display, in the Iowa Gambling Task, different patterns that suggest a developmental continuum in loss-aversion:
- (a) guessing with a slight tendency to consider frequency of loss to
- (b) focusing on frequency of loss, to
- (c) considering both frequency and amount of probabilistic loss.
- Hilde M. Huizenga, Eveline A. Crone, Brenda J. Jansen. Decision-making in healthy children, adolescents and adults explained by the use of increasingly complex proportional reasoning rules. Developmental Science (OnlineEarly Articles).