Psychology Prospect Theory
PSY 302 Prospect Theory Review This paper is written in order to compare and contrast two articles that were chosen from the social psychology field. I chose my topic as Prospect Theory. It is one of the theories related to decision making process. This theory not only supported in social psychology but also supported fields of economic, consumer choice, political science and marketing. Prospect theory explains that people are loss averse that means they weigh losses heavily than gains.
In other words, “looses looms larger than gains”. To illustrate; the person who found $100 on street would be less happy than the person who lost $100. The one of reason could be looses are more painful than gains are pleasant. Thus, humans cannot easily get rid of the effect of bad outcomes. I learned firstly this theory from one of my marketing courses and I really interested in that theory because it is implications likely to occur in our lives but I have never thought of it.
That is why I choose two of my articles from that theory and I wanted to learn what different perspectives to that theory are. Those chosen articles are “When small losses do not loom larger than small gains: Effects of contextual autonomy support and goal contents on behavioral responses to small losses and small gains” and “When gains loom larger than losses: reversed loss aversion for small amounts of money. ” However those two article tried to explain the time when looses do not loom larger than gains.
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That means within a specific situations prospect theory would be reversed. The rest of the paper will be devoted to comparison of their methodology, research question and predictions. Finally I will explain my opinion and suggestions to improve that research. First of all there will be an explanation of their research questions. “When gains loom larger than losses: reversed loss aversion for small amounts of money” tried to predict that when there is small loss, gains loom larger than losses. Thus, it says that prospect theory would be reversed for small things.
However the article called “When small losses do not loom larger than small gains: Effects of contextual autonomy support and goal contents on behavioral responses to small losses and small gains” tried to predict that in the conditions of psychological needs may increase behavioral responses to gains more than behavioral responses to losses. To sum up, their theory same as “When gains loom larger than losses: reversed loss aversion for small amounts of money” because both of them predicted that loses may not loom larger than gains.
However there are differences in terms of conducting those predictions. The main difference among those two articles is that “When gains loom larger than losses: reversed loss aversion for small amounts of money” put their hypothesis in terms of monetary values whereas other article tried to understand behavioral and affective responses to gains because writers think that loss aversion hypothesis gives importance to monetary phenomena not behavioral responses. Thus, they tried to understand the effect of goal fulfilling on prospect theory.
Goals are related to this issue because in article they pointed out that, goals are seen as reference points. Humans evaluate their success or unsuccessfulness of outcomes comparing themselves to reference point, they determined. Thus, reference outcomes determine whether they faced a loss or they face a gain. That means in terms of behavioral responses of prospect theory, reference points are important. REFERENCES Harinek, F. , Dijk, E. V. , Beest, I. V. , & Mersmann, P. (2007). When gains loom larger than losses:reversed loss aversion for small amounts of money.
Psychological science, 18(12), 1099-1105. (Harinek, Dijk, Beest & Mersmann, 2007) Chatzisarantis, N. L. D. , Kee, Y. H. , Thaung, H. K. , & Hagger, M. S. (2011). British journal of social psychology. When small losses do not loom larger than small gains: Effects of contextual autonomy support and goal contents on behavioral responses to small losses and small gains, Retrieved from http://onlinelibrary. wiley. com/doi/10. 1111/j. 2044-8309. 2011. 02033. x/abstract (Chatzisarantis, Kee, Thaung & Hagger, 2011)
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