How the threat of losses makes people explore more than the promise of gains

Until recently, loss aversion has been inferred exclusively from choice asymmetries in the loss and gain domains. This study examines the impact of the prospect of losses on exploratory search in a situation in which exploration is costly. Taking advantage of the largest available data set of decisions from experience, analyses showed that most people explore payoff distributions more under the threat of a loss than under the promise of a gain. This behavioral regularity thus occurs in both costly search and cost-free search (see Lejarraga, Hertwig, & Gonzalez, Cognition, 124, 334–342, 2012). Furthermore, a model comparison identified the simple win-stay-lose-shift heuristic as a likely candidate mechanism behind the loss–gain exploration asymmetry observed. In contrast, models assuming loss aversion failed to reproduce the asymmetry. Moreover, the asymmetry was not simply a precursor of loss aversion but a phenomenon separate from it. These findings are consistent with the recently proposed notion of intensified vigilance in the face of potential losses.