Deciding for others reduces loss aversion
Abstract
We study risk taking on behalf of others, both when choices involve losses and when they do not. A large-scale incentivized experiment with subjects randomly drawn from the Danish population is conducted. We find that deciding for others reduces loss aversion. When choosing between risky prospects for which losses are ruled out by design, subjects make the same choices for themselves as for others. In contrast, when losses are possible, we find that the two types of choices differ. In particular, we find that subjects who make choices for themselves take less risk than those who decide for others when losses loom. This finding is consistent with an interpretation of loss aversion as a bias in decision making driven by emotions and that these emotions are reduced when making decisions for others. This paper was accepted by Uri Gneezy, behavioral economics.
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The evidence for gender differences in loss aversion is inconsistent.
“Consistent with this analysis, although women are generally found to be more risk-averse than men -perhaps because evolutionary pressures require the higher investing sex to be more cautious, since the costs of a poor mating decision are typically greater for women than for men (Buss, 1997) -the evidence for gender differences in loss aversion is inconsistent (Andersson et al., 2016; Chapman et al”
From Talking the talk, not walking the walk: The coevolution of overconfidence and loss aversion (2026) · cites this paper as Andersson et al., 2016
Cites
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Ambiguity and excuse-driven behavior in charitable giving
Garcia, T., Massoni, S., & Villeval, M. C. (2020) · European Economic Review · doi:10.1016/j.euroecorev.2020.103412 · Cited by 62 · see citing works
Talking the talk, not walking the walk: The coevolution of overconfidence and loss aversion
Dawson, C., & de Meza, D. (2026) · Psychological Review · doi:10.1037/rev0000644 · Cited by 2 · see citing works
- Authors
- Andersson, O., Holm, H. J., Tyran, J.-R., & Wengström, E.
- Affiliations
- Lund University (SE)
- University of Copenhagen (DK)
- Venue
- Management Science
- Published
- 2016-01
- Volume
- 62
- Issue
- 1
- Pages
- 29-36
- ISSN
- 0025-1909 (ISSN-L)
- 1526-5501
- OpenAlex
- W2132826689
- Cited by
- 194
- References
- 6
- Citations by year
- 2026: 6 · 2025: 16 · 2024: 14 · 2023: 19 · 2022: 19 · 2021: 18 · 2020: 16 · 2019: 30 · 2018: 20 · 2017: 19 · 2016: 8 · 2015: 8 · 2014: 1
- FWCI
- 9.89
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- Management Science (publishedVersion)
- Lund University Publications (Lund University) (submittedVersion)
- Research at the University of Copenhagen (University of Copenhagen) (submittedVersion)
- Funders
- Konkurrensverket
- Kungliga Tekniska Högskolan
- Topics
- Social Sciences › Decision Sciences › General Decision Sciences › Decision-Making and Behavioral Economics
- Social Sciences › Safety Research › Experimental Behavioral Economics Studies
- Social Sciences › Decision Sciences › Management Science and Operations Research › Leadership, Behavior, and Decision-Making Studies
- Keywords
- loss aversion, risk-taking, decision-making for others, risky prospects, emotional decision-making, behavioral biases
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