Strength of Preference and Effects of Valence in the Domains of Gains and Losses

Abstract

In comparative judgments that follow binary choices, judgments of “How much better is a preferred option?” and “How much worse is a less preferred option?” may differ in their magnitudes (“valence effects”). This paper analyzed cognitive processes that underlie positive valence effects (“Better” exceeding “Worse”) and negative valence effects (Worse exceeding Better). My analyses used a “focus shift model.” The focus shift model postulates that choice options are represented as sets of desirable and undesirable features. Difference judgments are reached by assigning subjective weights onto such features and integrating weighted feature contributions. Positive and negative valence effects reflect the differences in subjective weighting depending on valence of judgments. Experiments 1 through 3 showed that systematic positive valence effects were observed in the domain of gains, whereas negative valence effects were observed in the domain of losses. Estimates of subjective weights showed that valence effects occurred when participants heavily weighted desirable features in preferred options and undesirable features in less preferred options. These patterns of subjective weighting for positive and negative valence effects were consistent with the focus shift model. Data were more consistent with the focus shift model over alternative explanations of valence effects. Relationship with relevant economic and psychological phenomena are discussed.