The Neural Basis of Loss Aversion in Decision-Making Under Risk

TLDR

Decision makers are more sensitive to losses than to equivalent gains. The study examined neural correlates of loss aversion by having participants decide to accept or reject 50/50 monetary gambles while recording brain activity. Brain activity in midbrain dopaminergic regions increased with potential gains and decreased with potential losses, and individual loss‑aversion behavior was predicted by neural loss‑aversion signals in the ventral striatum and prefrontal cortex.

Abstract

People typically exhibit greater sensitivity to losses than to equivalent gains when making decisions. We investigated neural correlates of loss aversion while individuals decided whether to accept or reject gambles that offered a 50/50 chance of gaining or losing money. A broad set of areas (including midbrain dopaminergic regions and their targets) showed increasing activity as potential gains increased. Potential losses were represented by decreasing activity in several of these same gain-sensitive areas. Finally, individual differences in behavioral loss aversion were predicted by a measure of neural loss aversion in several regions, including the ventral striatum and prefrontal cortex.