Loss Aversion or Loss Attention?
Professor Eldad Yechiam, Dean, Faculty of Data and Decision Science, Technion

Loss aversion refers to the tendency to assign greater subjective weight to losses than gains of equal magnitude. While loss aversion has been demonstrated in numerous studies and has been used to understand more complex economic phenomena, there is a recent debate concerning its reliability and magnitude, and the exact cognitive processes induced by negative outcomes. The goal of the present talk is to clarify the concept of loss aversion as well as the debate and its implications. We first present a new meta-analysis focusing on decisions under risk, showing that loss aversion mostly emerges in experiments where most losses are smaller than gains and where gains and losses are presented in an ordered sequence, and that by contrast, when gains and losses are similar and unordered, loss aversion is rather weak (on average, around 10% greater weight assigned to losses than gains) and fails to emerge significantly. We then discuss evidence for gain-loss disparities in riskless decisions and highlight an alternative cognitive asymmetry driven by gains and losses that can lead to loss-aversion-like phenomena in these settings. Specifically, the effect of losses on task attention, known as “loss attention” can account for the strong boosting effect of negative framing over positive framing on performance, even though loss aversion itself may be a weak or null effect phenomenon given these same gains and losses. We suggest that much of the effect of losses on human behavior is driven by increased attention rather than increased weighting.

Professor Eldad Yechiam joined the Faculty of Data and Decision Sciences in 2005. He received his Ph.D in Cognitive Psychology at the Technion in 2003. Previously, he was a postdoctoral fellow in Indiana University, Bloomington. Prof. Yechiam’s area of work is decision making, learning, and behavioral economics. His main contributions are in the study of cognitive asymmetries that result from different incentive structures, individual differences in decision making, and cognitive enhancement. Prof. Yechiam currently serves as the dean of the faculty of Data and Decisions Sciences. He holds the Harry Lebenfeld Chair in Sciences. Previous, he was the editor in Chief of the Journal of Economic Psychology and the elected president of the European Society for Decision Making (EADM). His first book “Left Hand” (in Hebrew) was published by Nine Lives Press (2025) and his second book “He Should have Left After the Alien Story was recently published by Afik-Hatachana Press (2026).