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Keywords:

  • loss aversion;
  • implicit associations;
  • attitude formation;
  • IAT;
  • gambling

Abstract

Kahneman and Tversky's prospect theory states, among other things, that losses loom larger than gains. As much research as this simple idea has generated, key questions remain. How fundamental is the losses-looming-larger effect: will it emerge under more minimal circumstances than previously tested and will it manifest in implicit associations? And how does the actual experience of predominant losses or gains affect the losses-looming-larger effect? In two experiments employing non-traditional methods, participants experienced slot machine spins in which symbols were paired with gain, loss, and neutral outcomes. After experiencing these pairings, participants took Implicit Association Tests (IATs). In Experiment 1, implicit associations formed by the minimal experience of the slot machine were lopsided: negative associations with the loss symbol were stronger than positive associations with the gain symbol. In addition, it was found that the extent to which losses loomed larger depended on the context of the slot machine experience, with losses looming implicitly larger than gains most when they were fewer in number (participants experienced a net-gain) and least when they were the predominant outcome (participants experienced a net-loss). Finally, in Experiment 2, a potential artifact was ruled out and a replication obtained by showing that slot machine losses implicitly loom larger whether conceptualized from the perspective of a casino player or a casino owner. Copyright © 2008 John Wiley & Sons, Ltd.