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The severity of gambling problem and loss aversion in healthy gamblers : the implications of Prospect Theory in gambling research

University of British Columbia

Gambling decisions are inherently risky decisions involving wins and losses. The severity of gambling problems varies with the persistence of betting despite mounting losses. ‘Prospect Theory’, a descriptive model of risky decision-making from the field of behavioural economics, describes an influential phenomenon called Loss Aversion: the natural tendency for “losses to loom larger than gains” when people evaluate risky choices (Kahneman and Tversky, 1992). It is an intuitive prediction that people with the more severe gambling problem will display systematic alterations in their loss aversion. Experiment 1 reviewed two widely-used loss aversion tasks (the ‘matrix’ and ‘staircase’ methods) in the past studies, which also have varied in whether trial-by-trial outcome feedback was presented within each task. Hence, Experiment 1 was a methodological study. It aimed to evaluate whether the presentation of outcome feedback influences loss aversion scores with student samples, as a precursor for Experiment 2 using this procedure in regular gamblers. Experiment 2 recruited non-problem gamblers with varying levels of sub-clinical gambling problems. With the established task, it studied the relationships between the severity of gambling problems and risk preferences including risk attitudes across the gain and loss domains, loss aversion, and probability distortions. In Experiment 1, the outcome feedback did not show significant influence on the level of loss aversion. In Experiment 2, the findings indicated that the risk attitudes in the gain domain were the only Prospect Theory-based variable that correlated with the severity of gambling problems; participants with more severe problems tended to be more risk-seeking in the gain domain, and in the loss domain, all participants displayed ambivalent choices between risk-seeking and risk-averse. Moreover, the level of loss aversion and the magnitudes of probability distortions for potential gains and losses did not correlate with the severity of gambling problems.

Text

2018-09-05

Attribution-NonCommercial-NoDerivatives 4.0 International

http://hdl.handle.net/2429/67114

Psychology

University of British Columbia

UBCV

http://creativecommons.org/licenses/by-nc-nd/4.0/