A Subtle Pronoun Shift Reduces Loss Aversion

16 Pages Posted: 19 Oct 2021 Last revised: 8 Jan 2022

See all articles by Tai-Sen He

Tai-Sen He

Nanyang Technological University (NTU) - Division of Economics

Yupeng Li

Nanyang Technological University

Jubo Yan

Nanyang Technological University - School of Social Sciences

Date Written: October 19, 2021

Abstract

In this paper, we propose and examine the de-biasing effect of self-distancing on loss aversion. In a laboratory setting, subjects made a set of binary decisions on whether to participate in a mixed gamble. Stemmed from the psychological literature on self-distancing, we manipulated the degree of self-distancing through the use of personal pronouns. We administered four treatment conditions —“I,” “You,” “No Pronoun,” and “Participant”—and subtly embedded this linguistic manipulation in the description of the payoff outcomes. Our results show that people exhibited a lower degree of loss aversion when the payoff information was conveyed using a pronoun that induced a higher level of self-distancing. Females were so much more responsive than were males to these subtle linguistic cues that the gender difference in loss aversion was closed in the two self-distanced conditions. The results have important theoretical and policy implications.

Keywords: self-distancing; loss aversion; personal pronouns; gender difference

JEL Classification: D81, C91

Suggested Citation

He, Tai-Sen and Li, Yupeng and Yan, Jubo, A Subtle Pronoun Shift Reduces Loss Aversion (October 19, 2021). Available at SSRN: https://ssrn.com/abstract=3945320 or http://dx.doi.org/10.2139/ssrn.3945320

Tai-Sen He

Nanyang Technological University (NTU) - Division of Economics ( email )

SHHK 04-40
48 Nanyang Ave
Singapore, 639818
Singapore

Yupeng Li

Nanyang Technological University ( email )

HSS 04-53, 14 Nanyang Drive
Singapore, 639798
Singapore

Jubo Yan (Contact Author)

Nanyang Technological University - School of Social Sciences ( email )

HSS 04-68, 14 Nanyang Drive
Singapore, 639798
Singapore

HOME PAGE: http://juboyan.weebly.com

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