Proceedings of the Annual Meeting of the Cognitive Science Society

It is a well-known observation that people tend to dislike risky situations that could potentially lead to a loss, a phenomenon that is called loss aversion. This is often explained using valuation bias, i.e., the subjective value of losses is larger than the subjective value of gains of equal magnitude. However, recent studies using the drift-diffusion model have shown that a pre-valuation bias towards rejection is also a primary determinant of loss-averse behavior. It has large contributions to model fits, predicts a key relationship between rejection rates and response times, and explains the most individual heterogeneity in the rejection rates of participants. We analyzed data from three previously published experiments using the drift-diffusion model and found that these findings generalize to them. However, we found that valuation bias plays the most important role in predicting how likely a person is to accept a given gamble. Our findings also showed that a person's loss aversion parameter, $\lambda$, which captures their propensity to avoid losses is closely related to valuation bias. These results combined highlight the importance of valuation bias in understanding people's choice patterns. Finally, using the leaky, competing accumulator model, we show strong mimicking between valuation bias and an attentional bias wherein people pay more attention to losses as compared to gains. This finding suggests that behaviors that seem to arise due to valuation bias may arise due to such an attentional bias.