Loss Aversion and Risk Aversion in Wagering on Jeopardy!’s “Daily Double”*

Abstract

Objectives The objective of the study was to test predictions of loss aversion and risk aversion by analyzing contestant wagers in the game show Jeopardy! Methods The primary method employed in this article is ordinary least squares regression analysis but the mean wagers of contestants in various player subcategories and stages of the game are also analyzed. Results The results support the core proposition of loss aversion in that the mean wagers of contestants who are behind in the game are greater than are the mean wagers of contestants who are ahead in the game. The results also indicate some differences in the behavior of men and women in risk taking and that contestants make use of frames of reference in making their wagers such as how far ahead or behind they are in points and how much “time” is left in the game at the time of their wager. Conclusion Given the results of this article and a review of other relevant literature, the suggestion is made that future studies of loss aversion and risk aversion continue to explore complexity and variation in the context of decision making and that future research into possible differences by sex in risk aversion explore scenarios in which choices are grounded in other‐ or community‐oriented situations rather than scenarios centering only on individual gains.

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