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Title: Effects of loss aversion on the evaluation of decision outcomes
Author: Kokmotou, Aikaterini
ISNI:       0000 0004 7964 2523
Awarding Body: University of Liverpool
Current Institution: University of Liverpool
Date of Award: 2019
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Loss aversion is the tendency to prefer avoiding losses over acquiring gains of the same amount. This thesis aimed to explore the neural correlates of loss aversion and its effects on the evaluation of monetary decision outcomes. Decision making in different contexts was investigated in order to identify specific conditions that could modulate the loss aversion effects. Individual differences in loss aversion were estimated by employing a gambling task and parametric modelling of participants' choice behaviour. Electroencephalographic (EEG) recordings and event-related potential (ERP) analysis were utilised in order to investigate the neural mechanisms underlying loss aversion during the processing of decision outcomes. Results from across four experimental studies showed that loss aversion was consistently associated with feedback ERPs. Specifically, the first study demonstrated that loss aversion was associated with feedback-related negativity (FRN) component after learning the decision outcome. Individual differences in orbitofrontal cortex (OFC) activity during the FRN time window were further associated with individual differences in loss aversion. In the second study, loss aversion was associated with FRN as well as with P300 component following obtained gains and losses. However, no such associations were found for counterfactual gains and losses (i.e., outcomes that could have been obtained if a different decision has been made). The third study showed that outcomes from choices made by participants themselves and outcomes resulting from choices that were arbitrarily inflicted upon participants were processed differently. This effect was specific for losses in that losses resulting from unchosen decisions produced stronger ERP amplitudes compared to losses resulting from decisions chosen by participants. Furthermore, this result was only found for participants who displayed increased P300 amplitudes following an obstruction of their choice and loss aversion was associated with FRN only in the condition of outcomes freely chosen by those participants. The fourth study investigated loss aversion within a social context and revealed that participants experienced similar levels of loss aversion for themselves and others. For decisions regarding the self, the classic FRN was found, however, for decisions regarding others, the FRN was of opposite polarity. Furthermore, loss aversion was associated only with FRN following decisions that participants made for themselves but not with FRN following decisions that participants made for others. This thesis concludes that individual differences in loss aversion exert robust effects on the neural evaluation of decision outcomes. These effects were represented in feedback ERP components, under the condition that decision outcomes had real monetary consequences for the decision makers. Moreover, specific conditions that could modify the association between loss aversion and feedback ERPs were identified. The motivational significance of the decision outcomes for the decision makers appears to be the main factor shaping such effects.
Supervisor: Stancak, Andrej ; Pantelous, A. Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral