Credit Card Experiment

So What we're seeing here is that people don't like losses. OK, that was not a really helpful statement in and of itself because even with the regular expected utility model, more money was still better than less money. So to some degree, regardless of what model you're looking at, people don't like losses. I think that's a pretty consistent aspect of human behavior, I would say. But what we're showing with the two questions we asked here is not only that people don't like losses, but that they just really don't like losses. And by really, I mean, they hate losses more than they like equivalent gains. So there's some bias, and decision-making is being brought in when we make people think about things as losses rather than when we make people think about things as gains. Even when logically or rationally, nothing has actually changed. And this is what this asymmetry is, the fact that people dislike losses more than they like gains. Gains are what's actually causing this framing effect. And that's why people are changing their behavior. If they thought about losses and gains symmetrically, this wouldn't be happening.