Loss aversion is a human tendency, which is used to explain the reference price effect. We critically examined the loss aversion account of the reference price effect in accommodation decisions by adopting a mixed-method approach. Physiological reactions to losses were captured by electrodermal activities and trait loss aversion was measured by a behavioral economic task. We tested whether trait loss aversion predicts individuals’ susceptibility to the reference price effect in lodging decisions and whether physiological reactions mediate the effect. We explored the moderating role of travel use history and established a methodological triangulation among the three loss-aversion measures: trait, hotel choice, and physiological. The physiological results gave support to the role of emotions in the reference price effect. Our findings provide valuable insights for managers in addressing asymmetric pricing, particularly highlighting the importance of monitoring customer emotional fluctuations during price presentation and segmenting the market based on travel experience.
AsahinaM.SuzukiA.MoriM.KanesakaT.HattoriT. (2003). Emotional sweating response in a patient with bilateral amygdala damage. International Journal of Psychophysiology, 47(1), 87–93. https://doi.org/10.1016/S0167-8760(02)00123-X
2.
BachD. R.FristonK. J. (2013). Model-based analysis of skin conductance responses: Towards causal models in psychophysiology. Psychophysiology, 50(1), 15-22. https://doi.org/10.1111/j.1469-8986.2012.01483.x
3.
BecharaA.DamasioH.DamasioA. R.LeeG. P. (1999). Different contributions of the human amygdala and ventromedial prefrontal cortex to decision-making. Journal of Neuroscience, 19(13), 5473–5481. https://doi.org/10.1523/JNEUROSCI.19-13-05473.1999
4.
BenartziS.ThalerR. H. (1995). Myopic loss aversion and the equity premium puzzle. The Quarterly Journal of Economics, 110(1), 73–92. https://doi.org/10.2307/2118511
BibbyP. A.FergusonE. (2011). The ability to process emotional information predicts loss aversion. Personality and Individual Differences, 51(3), 263–266. https://doi.org/10.1016/j.paid.2010.05.001
7.
BiswasD.GrauS. L. (2008). Consumer choices under product option framing: Loss aversion principles or sensitivity to price differentials?Psychology and Marketing, 25(5), 399–415. https://doi.org/10.1002/mar.20217
8.
BombardiniM.TrebbiF. (2005). Risk aversion and expected utility theory: A field experiment with large and small stakes. Department of Economics, University of British Columbia. https://papers.economics.ubc.ca/legacypapers/dp0520.pdf
9.
BonnetL.ComteA.TatuL.MillotJ. L.MoulinT.Medeiros de BustosE. (2015). The role of the amygdala in the perception of positive emotions: An ‘intensity detector’. Frontiers in Behavioral Neuroscience, 9, Article 178. https://doi.org/10.3389/fnbeh.2015.00178
10.
BoyceC. J.WoodA. M.FergusonE. (2016). Individual differences in loss aversion: Conscientiousness predicts how life satisfaction responds to losses versus gains in income. Personality and Social Psychology Bulletin, 42(4), 471–484. https://doi.org/10.1177/0146167216634060
11.
BrieschR. A.KrishnamurthiL.MazumdarT.RajS. P. (1997). A comparative analysis of reference price models. Journal of Consumer Research, 24(2), 202–214. https://doi.org/10.1086/209505
12.
BrownA. L.ImaiT.VieiderF. M.CamererC. F. (2024). Meta-analysis of empirical estimates of loss aversion. Journal of Economic Literature, 62(2), 485-516. https://doi.org/10.1257/jel.20221698
13.
BührenC.KundtT. C. (2015). Imagine being a nice guy: A note on hypothetical vs. incentivized social preferences. Judgment and Decision Making, 10(2), 185–190. https://doi.org/10.1017/S1930297500003946
CamererC.BabcockL.LoewensteinG.ThalerR. (1997). Labor supply of New York City cabdrivers: One day at a time. The Quarterly Journal of Economics, 112(2), 407–441. https://doi.org/10.1162/003355397555244
16.
CamererC. F.HogarthR. M. (1999). The effects of financial incentives in experiments: A review and capital-labor-production framework. Journal of Risk and Uncertainty, 19(1–3), 7–42. https://doi.org/10.1023/a:1007850605129
17.
CanessaN.CrespiC.MotterliniM.Baud-BovyG.ChierchiaG.PantaleoG.TettamantiM.CappaS. F. (2013). The functional and structural neural basis of individual differences in loss aversion. Journal of Neuroscience, 33(36), 14307–14317. https://doi.org/10.1523/jneurosci.0497-13.2013
18.
CaruelleD.GustafssonA.ShamsP.Lervik-OlsenL. (2019). The use of electrodermal activity (EDA) measurement to understand consumer emotions—A literature review and a call for action. Journal of Business Research, 104, 146–160. https://doi.org/10.1016/j.jbusres.2019.06.041
19.
ChangS. (2018). Experience economy in hospitality and tourism: Gain and loss values for service and experience. Tourism Management, 64, 55–63. https://doi.org/10.1016/j.tourman.2017.08.004
20.
CharkR.LamL. W.FongL. H. N. (2020). Morning larks travel more than night owls? Chronotypical effect on travel frequency through novelty seeking. Tourism Management, 77, Article 104035. https://doi.org/10.1016/j.tourman.2019.104035
21.
ChatterjeeP.IrmakC.RoseR. L. (2013). The endowment effect as self-enhancement in response to threat. Journal of Consumer Research, 40(3), 460–476. https://doi.org/10.1086/671344
22.
ChenM. K.LakshminarayananV.SantosL. R. (2006). How basic are behavioral biases? Evidence from capuchin monkey trading behavior. Journal of Political Economy, 114(3), 517–537. https://doi.org/10.1086/503550
23.
ChengL. L.MonroeK. B. (2013). An appraisal of behavioral price research (part 1): Price as a physical stimulus. AMS Review, 3, 103–129. http://doi.org/10.1007/s13162-013-0041-1
24.
ChoiC.MattilaA. S. (2018). The effects of internal and external reference prices on travelers’ price evaluations. Journal of Travel Research, 57(8), 1068–1077. https://doi.org/10.1177/0047287517735910
De MartinoB.CamererC. F.AdolphsR. (2010). Amygdala damage eliminates monetary loss aversion. Proceedings of the National Academy of Sciences, 107(8), 3788–3792. https://doi.org/10.1073/pnas.0910230107
27.
DommerS. L.SwaminathanV. (2013). Explaining the endowment effect through ownership: The role of identity, gender, and self-threat. Journal of Consumer Research, 39(5), 1034–1050. https://doi.org/10.1086/666737
28.
DraperJ. (2016). An exploratory study of the differences in prior travel experience and tourist information sources. Tourism and Hospitality Research, 16(2), 133–143. https://doi.org/10.1177/1467358415600216
29.
DraperJ.WoosnamK. M.NormanW. C. (2011). Tourism use history: Exploring a new framework for understanding residents’ attitudes toward tourism. Journal of Travel Research, 50(1), 64–77. https://doi.org/10.1177/0047287509355322
30.
ErdemT.KatzM. L.SunB. (2010). A simple test for distinguishing between internal reference price theories. Quantitative Marketing and Economics, 8(3), 303–332. https://doi.org/10.1007/s11129-010-9087-7
31.
FehrE.GoetteL. (2007). Do workers work more if wages are high? Evidence from a randomized field experiment. American Economic Review, 97(1), 298–317. https://doi.org/10.1257/aer.97.1.298
32.
FignerB.MurphyR. O. (2011). Using skin conductance in judgment and decision making research. In Schulte-MecklenbeckM.KuehbergerA.JohnsonJ. G. (Eds.), A handbook of process tracing methods for decision research: A critical review and user’s guide (pp. 163–184). Psychology Press.
33.
FisherG.RangelA. (2014). Symmetry in cold-to-hot and hot-to-cold valuation gaps. Psychological Science, 25(1), 120–127. https://doi.org/10.1177/0956797613502362
34.
FiskeD. W. (1966). On the coordination of personality concepts and their measurement. Human Development, 9(1–2), 74–83. https://doi.org/10.1159/000270371
35.
GächterS.JohnsonE. J.HerrmannA. (2022). Individual-level loss aversion in riskless and risky choices. Theory and Decision, 92(3), 599–624. https://doi.org/10.1007/s11238-021-09839-8
36.
GenesoveD.MayerC. (2001). Loss aversion and seller behavior: Evidence from the housing market. The Quarterly Journal of Economics, 116(4), 1233–1260. https://doi.org/10.1162/003355301753265561
37.
GuoT.SpinaR. (2016). Chinese are more loss averse than British. Asian Journal of Social Psychology, 19(2), 154-162. https://doi.org/10.1111/ajsp.12129
38.
GuttmanZ. R.GhahremaniD. G.PochonJ. B.DeanA. C.LondonE. D. (2021). Age influences loss aversion through effects on posterior cingulate cortical thickness. Frontiers in Neuroscience, 15, 673106. https://doi.org/10.3389/fnins.2021.673106
39.
HammittW. E. (1981). The familiarity-preference component of on-site recreational experiences. Leisure Sciences, 4(2), 177–193. https://doi.org/10.1080/01490408109512959
40.
HardieB. G.JohnsonE. J.FaderP. S. (1993). Modeling loss aversion and reference dependence effects on brand choice. Marketing Science, 12(4), 378–394. https://doi.org/10.1287/mksc.12.4.378
41.
HayesA. F. (2013). Introduction to mediation, moderation, and conditional process analysis: A regression-based approach. Guilford Press.
42.
HintzeA.OlsonR. S.AdamiC.HertwigR. (2015). Risk sensitivity as an evolutionary adaptation. Scientific Reports, 5(1), 1–7. https://doi.org/10.1038/srep08242
43.
HosanyS.MartinD.WoodsideA. G. (2021). Emotions in tourism: Theoretical designs, measurements, analytics, and interpretations. Journal of Travel Research, 60(7), 1391–1407. https://doi.org/10.1177/0047287520937079
44.
InmanC. S.BijankiK. R.BassD. I.GrossR. E.HamannS.WillieJ. T. (2020). Human amygdala stimulation effects on emotion physiology and emotional experience. Neuropsychologia, 145, 1–13. https://doi.org/10.1016/j.neuropsychologia.2018.03.019
45.
KahnemanD.KnetschJ. L.ThalerR. H. (1990). Experimental tests of the endowment effect and the Coase theorem. Journal of Political Economy, 98(6), 1325–1348. https://doi.org/10.1086/261737
46.
KahnemanD.KnetschJ. L.ThalerR. H. (1991). Anomalies: The endowment effect, loss aversion, and status quo bias. Journal of Economic Perspectives, 5(1), 193–206. https://doi.org/10.1257/jep.5.1.193
47.
KahnemanD.TverskyA. (1979). Prospect theory: An analysis of choices involving risk. Econometrica, 47, 263–291. https://doi.org/10.2307/1914185
48.
KalyanaramG.LittleJ. D. (1994). An empirical analysis of latitude of price acceptance in consumer package goods. Journal of Consumer Research, 21(3), 408–418. https://doi.org/10.1086/209407
49.
KalyanaramG.WinerR. S. (1995). Empirical generalizations from reference price research. Marketing Science, 14(Suppl. 3), G161–G169. https://doi.org/10.1287/mksc.14.3.g161
50.
KalyanaramG.WinerR. S. (2022). Behavioral response to price: Data-based insights and future research for retailing. Journal of Retailing, 98(1), 46–70. https://doi.org/10.1016/j.jretai.2022.02.009
51.
KarleH.KirchsteigerG.PeitzM. (2015). Loss aversion and consumption choice: Theory and experimental evidence. American Economic Journal: Microeconomics, 7(2), 101–120. https://doi.org/10.1257/mic.20130104
52.
KimD.ParkB. J. R. (2017). The moderating role of context in the effects of choice attributes on hotel choice: A discrete choice experiment. Tourism Management, 63, 439–451. https://doi.org/10.1016/j.tourman.2017.07.014
53.
KimJ.FesenmaierD. R. (2015). Measuring emotions in real time: Implications for tourism experience design. Journal of Travel Research, 54(4), 419–429. https://doi.org/10.1177/0047287514550100
54.
KlapperD.EblingC.TemmeJ. (2005). Another look at loss aversion in brand choice data: Can we characterize the loss averse consumer?International Journal of Research in Marketing, 22(3), 239–254. https://doi.org/10.1016/j.ijresmar.2004.09.002
KokmotouK.CookS.XieY.WrightH.SotoV.FallonN.GiesbrechtT.PantelousA.StancakA. (2017). Effects of loss aversion on neural responses to loss outcomes: An event-related potential study. Biological Psychology, 126, 30–40. https://doi.org/10.1016/j.biopsycho.2017.04.005
57.
LeDouxJ. (1998). The emotional brain: The mysterious underpinnings of emotional life. Simon and Schuster.
LevinI. P.SchreiberJ.LauriolaM.GaethG. J. (2002). A tale of two pizzas: Building up from a basic product versus scaling down from a fully-loaded product. Marketing Letters, 13(4), 335–344. https://doi.org/10.1023/a:1020370516638
60.
LiS.CharkR.BastiaansenM.WoodE. (2023). A review of research into neuroscience in tourism: Launching the annals of tourism research curated collection on neuroscience in tourism. Annals of Tourism Research, 101, Article 103615. https://doi.org/10.1016/j.annals.2023.103615
61.
LiS.SungB.LinY.MitasO. (2022). Electrodermal activity measure: A methodological review. Annals of Tourism Research, 96, Article 103460. https://doi.org/10.1016/j.annals.2022.103460
62.
LiS.WaltersG.PackerJ.ScottN. (2018a). Using skin conductance and facial electromyography to measure emotional responses to tourism advertising. Current Issues in Tourism, 21(15), 1761–1783. https://doi.org/10.1080/13683500.2016.1223023
63.
LiS.WaltersG.PackerJ.ScottN. (2018b). A comparative analysis of self-report and psychophysiological measures of emotion in the context of tourism advertising. Journal of Travel Research, 57(8), 1078–1092. https://doi.org/10.1177/0047287517733555
LowengartO. (2002). Reference price conceptualisations: An integrative framework of analysis. Journal of Marketing Management, 18(1–2), 145–171. https://doi.org/10.1362/0267257022775972
66.
LuiM.HsuM. (2018). Viewing sexual images is associated with reduced physiological arousal response to gambling loss. PLoS One, 13(4), e0195748.
67.
MadduxW. W.YangH.FalkC.AdamH.AdairW.EndoY.… HeineS. J. (2010). For whom is parting with possessions more painful? Cultural differences in the endowment effect. Psychological Science, 21(12), 1910-1917. https://doi.org/10.1177/0956797610388818
MurakamiH. (2015). Wind/Pinball: Two novels (T.Goossen, Trans.). Random House.
71.
NicolauJ. L. (2011). Differentiated price loss aversion in destination choice: The effect of tourists’ cultural interest. Tourism Management, 32(5), 1186–1195. https://doi.org/10.1016/j.tourman.2010.11.002
72.
NicolauJ. L. (2012). Asymmetric tourist response to price: Loss aversion segmentation. Journal of Travel Research, 51(5), 568–676. https://doi.org/10.1177/0047287511431321
73.
NicolauJ. L.SellersR. (2020). The bundling strategy: the one-click effect on loss aversion. Journal of Hospitality & Tourism Research, 44(4), 704-712. https://doi.org/10.1177/1096348019876692
74.
ParkC. W.JunS. Y.MacInnisD. J. (2000). Choosing what I want versus rejecting what I do not want: An application of decision framing to product option choice decisions. Journal of Marketing Research, 37(2), 187–202. https://doi.org/10.1509/jmkr.37.2.187.18731
75.
PaulhusD. L. (1984). Two-component models of socially desirable responding. Journal of Personality and Social Psychology, 46(3), 598–609. https://doi.org/10.1037//0022-3514.46.3.598
76.
PetrickJ. F.MarkertC.SasangoharF. (2020). Stress for success: Potential benefits of perceived and actual stress while cruising. Journal of Travel Research, 60(8), 1787–1801. https://doi.org/10.1177/0047287520966377
77.
PreacherK. J.RuckerD. D.HayesA. F. (2007). Addressing moderated mediation hypotheses: Theory, methods, and prescriptions. Multivariate Behavioral Research, 42(1), 185–227. https://doi.org/10.1080/00273170701341316
78.
RahmanA.CrouchG. I.LaingJ. H. (2018). Tourists’ temporal booking decisions: A study of the effect of contextual framing. Tourism Management, 65, 55–68. https://doi.org/10.1016/j.tourman.2017.09.016
79.
RahmanA.CrouchG. I.LevinI. P. (2018). Temporal tourism booking decisions and the effect of message and goal framing. Tourism Analysis, 23(1), 61–76. https://doi.org/10.3727/108354218x15143857349495
ReutskajaE.NagelR.CamererC. F.RangelA. (2011). Search dynamics in consumer choice under time pressure: An eye-tracking study. American Economic Review, 101(2), 900–926. https://doi.org/10.1257/aer.101.2.900
83.
RománC.MartínJ. C. (2016). Hotel attributes: Asymmetries in guest payments and gains: A stated preference approach. Tourism Management, 52, 488–497. https://doi.org/10.1016/j.tourman.2015.08.001
84.
RozinP.RoyzmanE. B. (2001). Negativity bias, negativity dominance, and contagion. Personality and Social Psychology Review, 5(4), 296–320. https://doi.org/10.1207/s15327957pspr0504_2
85.
SamuelsonW.ZeckhauserR. (1988). Status quo bias in decision making. Journal of Risk and Uncertainty, 1(1), 7–59. https://doi.org/10.1007/bf00055564
SchopenhauerA. (1995). The world as will and representation (Vol. 2, PayneE. F. S., Trans.). Dover. (Original work published 1844).
88.
ShafirE. (1993). Choosing versus rejecting: Why some options are both better and worse than others. Memory & Cognition, 21(4), 546–556. https://doi.org/10.3758/bf03197186
89.
ShinewK. J. (1993). The attractiveness and effectiveness of organizational reward options [Doctoral dissertation, Clemson University].
90.
ShovalN.SchvimerY.TamirM. (2018). Real-time measurement of tourists’ objective and subjective emotions in time and space. Journal of Travel Research, 57(1), 3–16. https://doi.org/10.1177/0047287517691155
91.
Sokol-HessnerP.CamererC. F.PhelpsE. A. (2013). Emotion regulation reduces loss aversion and decreases amygdala responses to losses. Social Cognitive and Affective Neuroscience, 8(3), 341–350. https://doi.org/10.1093/scan/nss002
92.
Sokol-HessnerP.HsuM.CurleyN. G.DelgadoM. R.CamererC. F.PhelpsE. A. (2009). Thinking like a trader selectively reduces individuals’ loss aversion. Proceedings of the National Academy of Sciences, 106(13), 5035–5040. https://doi.org/10.1073/pnas.0806761106
93.
SukK.LeeJ.LichtensteinD. R. (2012). The influence of price presentation order on consumer choice. Journal of Marketing Research, 49(5), 708–717. https://doi.org/10.1509/jmr.11.0309
94.
TaylorS. E. (1991). Asymmetrical effects of positive and negative events: The mobilization-minimization hypothesis. Psychological Bulletin, 110(1), 67–85. https://doi.org/10.1037//0033-2909.110.1.67
95.
TomS. M.FoxC. R.TrepelC.PoldrackR. A. (2007). The neural basis of loss aversion in decision-making under risk. Science, 315(5811), 515–518. https://doi.org/10.1126/science.1134239
96.
TverskyA.KahnemanD. (1991). Loss aversion in riskless choice: A reference-dependent model. The Quarterly Journal of Economics, 106(4), 1039–1061. https://doi.org/10.2307/2937956
97.
TverskyA.KahnemanD. (1992). Advances in prospect theory: Cumulative representation of uncertainty. Journal of Risk and Uncertainty, 5(4), 297–323. https://doi.org/10.1007/bf00122574
WakkerP. P. (2010). Prospect theory: For risk and ambiguity. Cambridge university press.
100.
WangM.RiegerM. O.HensT. (2017). The impact of culture on loss aversion. Journal of Behavioral Decision Making, 30(2), 270–281. https://doi.org/10.1002/bdm.1941
101.
WillemsenM. C.BöckenholtU.JohnsonE. J. (2011). Choice by value encoding and value construction: Processes of loss aversion. Journal of Experimental Psychology: General, 140(3), 303–324. https://doi.org/10.1037/a0023493
WoosnamK. M.DraperJ.JiangJ. K.AleshinloyeK. D.ErulE. (2018). Applying self-perception theory to explain residents’ attitudes about tourism development through travel histories. Tourism Management, 64, 357–368. https://doi.org/10.1016/j.tourman.2017.09.015
