Missed losses loom larger than missed gains: Electrodermal reactivity to decision choices and outcomes in a gambling task

Loss aversion is a defining characteristic of prospect theory, whereby responses are stronger to losses than to equivalently sized gains (Kahneman & Tversky Econometrica, 47, 263–291, 1979). By monitoring electrodermal activity (EDA) during a gambling task, in this study we examined physiological activity during risky decisions, as well as to both obtained (e.g., gains and losses) and counterfactual (e.g., narrowly missed gains and losses) outcomes. During the bet selection phase, EDA increased linearly with bet size, highlighting the role of somatic signals in decision-making under uncertainty in a task without any learning requirement. Outcome-related EDA scaled with the magnitudes of monetary wins and losses, and losses had a stronger impact on EDA than did equivalently sized wins. Narrowly missed wins (i.e., near-wins) and narrowly missed losses (i.e., near-losses) also evoked EDA responses, and the change of EDA as a function of the size of the missed outcome was modestly greater for near-losses than for near-wins, suggesting that near-losses have more impact on subjective value than do near-wins. Across individuals, the slope for choice-related EDA (as a function of bet size) correlated with the slope for outcome-related EDA as a function of both the obtained and counterfactual outcome magnitudes, and these correlations were stronger for loss and near-loss conditions than for win and near-win conditions. Taken together, these asymmetrical EDA patterns to objective wins and losses, as well as to near-wins and near-losses, provide a psychophysiological instantiation of the value function curve in prospect theory, which is steeper in the negative than in the positive domain.