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Student Effort in Preparing for Exams: Intertemporal Preferences and Loss Aversion
Author(s) -
Wüst Kirsten,
Beck Hanno
Publication year - 2012
Publication title -
decision sciences journal of innovative education
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.52
H-Index - 19
eISSN - 1540-4609
pISSN - 1540-4595
DOI - 10.1111/j.1540-4609.2011.00341.x
Subject(s) - loss aversion , compensation (psychology) , economics , behavioral economics , consumption (sociology) , work (physics) , prospect theory , sacrifice , risk aversion (psychology) , microeconomics , psychology , social psychology , expected utility hypothesis , financial economics , sociology , mechanical engineering , social science , archaeology , engineering , history
In the last two decades, much empirical research has been done in the field of behavioral economics to explain the psychological foundations for economic decisions. In particular, it has been shown that people exhibit time‐inconsistent behavior when making intertemporal decisions, i.e., they demand higher interest rates for a delay of their consumption in the near rather than in the distant future. People also show loss aversion. They demand more compensation for a loss than they are willing to sacrifice for a gain. We analyze these features for the nonmonetary decision of the amount of time invested in learning hours before an exam. Asked at two different points in time, the students were willing to learn more when the time of learning seemed far away than when the learning time had arrived. On the other hand, students were loss averse trying to prevent a deterioration of their grade to a larger extent than when they tried to work for an amelioration.