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Media type:
E-Article
Title:
Myopic loss aversion: Potential causes of replication failures
Contributor:
Klos, Alexander
imprint:
Cambridge University Press (CUP), 2013
Published in:Judgment and Decision Making
Language:
English
DOI:
10.1017/s1930297500003703
ISSN:
1930-2975
Origination:
Footnote:
Description:
<jats:title>Abstract</jats:title><jats:p>This paper presents two studies on narrow bracketing and myopic loss aversion. The first study shows that the tendency to segregate multiple gambles is eliminated if subjects face a certainty equivalent or a probability equivalent task instead of a binary choice. The second study argues that the behavioral differences previously attributed entirely to myopic loss aversion are partly because long-term return properties are simply easier to grasp if the return information is already provided in the form of long-term returns rather than one-year returns. Both results may be related to recent failures to replicate myopic loss aversion. When the choice situation is structured in such a way that it draws respondents’ attention to the final outcome distribution and/or if severe misestimations of long-term returns based on short-term return information are unlikely, behavioral differences consistent with myopic loss aversion are less likely to be observed.</jats:p>