Journal article

Loss aversion and high stakes

Stephen Easton, Sean Pinder

ACCOUNTING AND FINANCE | WILEY | Published : 2021

Abstract

Following Kahneman and Tversky, studies such as those by Haigh and List, Ert and Erev and Mukherjee et al. find that loss aversion increases as stake increases. This study extends the 2011 work of Berger and Pope by analysing over 68,000 US professional basketball games played from the initial National Basketball Association (NBA) season in 1946/1947 to the 2018/2019 season, and over 69,000 National Collegiate Athletic Association (NCAA) games played from the 2007/2008 season to the 2018/2019 season. We posit that, a priori, stakes, and therefore loss aversion, will be greater for NBA teams than for NCAA teams, and higher for home teams than for away teams. Further, loss aversion is expected..

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University of Melbourne Researchers