Motivating Innovation: The Effect of Loss Aversion on the Willingness to Persist

• 成果类型: Article
• 署名作者: Rosokha, Yaroslav; Younge, Kenneth
• 署名单位: Purdue University System; Purdue University; Swiss Federal Institutes of Technology Domain; Ecole Polytechnique Federale de Lausanne
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• DOI: 10.1162/rest_a_00846
• 发表日期: 2020-07
• 页码: 569-582
• 关键词: PROSPECT-THEORY; incentives; DECISION; overconfidence; COMMITMENT; QUALITY; games

摘要

We investigate the willingness of individuals to persist at exploration when confronted by prolonged periods of negative feedback. We design a two-dimensional maze game and run a series of randomized experiments with human subjects in the game. Our results suggest individuals explore more when they are reminded of the incremental cost of their actions, a result that extends prior research on loss aversion and prospect theory to environments characterized by model uncertainty. In addition, we run simulations based on a model of reinforcement learning that extend beyond two-period models of decision making to account for repeated behavior in longer-running, dynamic contexts.