When small losses do not loom larger than small gains: Effects of contextual autonomy support and goal contents on behavioural responses to small losses and small gains

Abstract

Based on the tenets of self-determination theory, the present studies examined the moderating effects of interpersonal contexts or goal conditions that afforded satisfaction of psychological needs on loss aversion effects. We hypothesized that behavioural responses to small losses would be stronger relative to behavioural responses to small gains under goal conditions or interpersonal contexts that did not support psychological needs. We also expected the effect to be minimized under goal conditions or interpersonal contexts that supported psychological needs. This prediction was supported in Study 1 that induced satisfaction of psychological needs via manipulations of interpersonal context and in Study 2 that instigated satisfaction of psychological needs via manipulations of goal contents. In addition, Studies 1 and 2 demonstrated that psychological needs reduced the classic loss aversion effect by increasing behavioural and affective responses to gains and not because psychological needs altered affective or behavioural responses to losses. Results of the present studies support the conclusion that contextual autonomy support and the distinction between intrinsic and extrinsic goals proposed by self-determination theory define a boundary condition of the loss aversion hypothesis.