title: Choice by value encoding and value construction: processes of loss aversion.
abstract: Loss aversion and reference dependence are 2 keystones of behavioral theories of choice, but little is known about their underlying cognitive processes. We suggest an additional account for loss aversion that supplements the current account of the value encoding of attributes as gains or losses relative to a reference point, introducing a value construction account. Value construction suggests that loss aversion results from biased evaluations during information search and comparison processes. We develop hypotheses that identify the influence of both accounts and examine process-tracing data for evidence. Our data suggest that loss aversion is the result of the initial direct encoding of losses that leads to the subsequent process of directional comparisons distorting attribute valuations and the final choice.
authors.affiliation: Department of Industrial Engineering and Innovation Sciences, Eindhoven University of Technology, Eindhoven, the Netherlands. m.c.willemsen@tue.nl
authors.forename: Martijn C
authors.initials: MC
authors.lastname: Willemsen
authors.forename: Ulf
authors.initials: U
authors.lastname: Böckenholt
authors.forename: Eric J
authors.initials: EJ
authors.lastname: Johnson
mesh_terms: D000328:Adult; D002755:Choice Behavior; D004644:Emotions; D005260:Female; D006801:Humans; D008297:Male; D008875:Middle Aged; D009042:Motivation