Prospect Theory in Times of a Pandemic: The Effects of Gain versus Loss Framing on Risky Choices and Emotional Responses during the 2020 Coronavirus Outbreak – Evidence from the US and the Netherlands

Abstract

ABSTRACT During the 2020 coronavirus pandemic, governments across the globe relied heavily on the legacy media, not only to inform citizens about fast-paced developments in the midst of a crisis, but also to stimulate compliance with strict interventions. Prospect theory postulates that gain versus loss framing may affect preferences for different interventions. In a conceptual replication of Tversky and Kahneman’s seminal prospect theory, findings from surveys in the US and the Netherlands (N = 1,121) demonstrate that gain frames of the coronavirus promote support for risk-aversive interventions, whereas loss frames result in relatively more support for risk-seeking alternatives. Loss frames elicit stronger negative emotions, such as frustration and powerlessness. The experience of powerlessness, in turn, mediates the effects of loss versus gain frames on support for stricter interventions. Together, these findings indicate that framing the pandemic in terms of gains may be most effective in promoting support for risk-aversive treatments of the pandemic.