Journal of Risk and Uncertainty

, Volume 31, Issue 3, pp 301–325 | Cite as

Loss Averse Behavior

  • Peter Brooks
  • Horst ZankEmail author


A behavioral condition of loss aversion is proposed and tested. Forty-nine students participated in experiments on binary choices among lotteries involving small scale real gains and losses. At the aggregate level, a significant proportion of the choices are in the direction predicted by loss aversion. Individuals can be classified as loss averse (28 participants), gain seeking (12), and unclassified (9). A comparison with risk behavior for binary choices on lotteries involving only gains shows that risk attitudes vary across these domains of lotteries. A gender effect is also observed: proportionally more women are loss averse. In contrast to the predictions of comonotonic independence, the size of common outcomes has systematic influence on choice behavior.


binary choice comonotonic independence gender effect loss aversion risk aversion 


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Copyright information

© Springer Science + Business Media, Inc. 2005

Authors and Affiliations

  1. 1.Economic StudiesUniversity of ManchesterUK

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