Premium
The sign effect, systematic devaluations and zero discounting
Author(s) -
Furrebøe Elise Frølich
Publication year - 2020
Publication title -
journal of the experimental analysis of behavior
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.75
H-Index - 61
eISSN - 1938-3711
pISSN - 0022-5002
DOI - 10.1002/jeab.598
Subject(s) - discounting , sign (mathematics) , delay discounting , aggregate (composite) , econometrics , replicate , psychology , zero (linguistics) , economics , statistics , mathematics , mathematical analysis , linguistics , materials science , philosophy , finance , composite material
The sign effect is the steeper discounting of gains compared to losses. However, we see a greater sign effect on an individual level compared to an aggregate level. In this experiment, we compare discounting of gains and losses on an individual and aggregate level, to explore further details about when and to what extent human adults discount. Thirty‐one participants went through a computer‐based choice‐task procedure of hypothetical monetary gains and losses. The results show clear qualitative differences between discounting of gains and losses, adding empirical data to support the sign effect. The results also support previous findings that show that aggregate and individual results do not always correspond. Further, the within‐subject details showing zero discounting or nonsystematic changes concerning losses, replicate earlier studies suggesting that discounting of gains and losses involve different reinforcing contingencies. The present study expands on this research area by including verbal reports, supplementing details about the unobserved reinforcing contingencies. Implications of research on discounting may indicate how to deal with decision‐making challenges and might shed light on why predictions about complex decision making sometimes fail.