BIAS OF THE WEEK

Loss Aversion

To discourage shoppers from using disposable plastic bags at grocey stores, they introduced 

  • A $0.05 reward for using reusable bags
  • A $0.05 tax for using disposable bag

We are often more motivated by loss than by gain

See the full study here :

Homonoff, Tatiana A. 2018. “Can Small Incentives Have Large Effects? The Impact of Taxes versus Bonuses on Disposable Bag Use.” American Economic Journal: Economic Policy10 (4): 177-210.DOI: 10.1257/pol.20150261

Want to know more about biases?

Ikea Effect

Commitment Bias

Group Attribution Error

Decoy Effect