Self–other decision making and loss aversion

In eight studies, we tested the prediction that making choices for others involves less loss aversion than making choices for the self. We found that loss aversion is significantly lessened among people choosing for others in scenarios describing riskless choice (Study 1), gambling (Studies 2 and 3), and social aspects of life, such as likeably and status (Studies 4a–e). Moreover, we found this pattern in relatively realistic conditions where people are rewarded for making desirable (i.e., profitable) choices for others (Study 2), when the other for whom a choice is made is physically present (Study 3), and when real money is at stake (Studies 2 and 3). Finally, we found loss aversion is moderated when factors associated with self–other differences in decision making are taken into account, such as decision makers’ construal level (Study 4a), regulatory focus (Study 4b), degree of information seeking (Study 4c), omission bias (Study 4d), and power (Study 4e).

► We found that making choices for others reduces loss aversion.
► In eight studies, we found this pattern across different domains and measures.
► We found this pattern when people were paid for making choices for others.
► We found this pattern in real-life choices with money at stake.
► We investigated five moderating variables; e.g., construal level, regulatory focus.