Losses reduce subsequent risk taking among bettors – applies to many other risky decisions, too

Psychologically, loss is known to cause about twice as much pain as pleasure caused by similar gain. However, earlier studies focusing on how prior outcomes affect subsequent risk taking have reported conclusions that appear mutually contradictory. A new study carried out by the University of Eastern Finland Business School among horse race bettors shows that loss reduces subsequent risk taking, and bettors also tend to avoid loss when betting money they have already won. The findings were published in Management Science. The researchers observed the betting behaviour of more than 5,