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Scholarship of Teaching and Learning in Psychology


Framing an outcome as a loss causes individuals to expend extra effort to avoid that outcome (Tversky & Kahneman, 1991). Since classroom performance is a function of student effort in search of a higher grade, we seek to use loss aversion to encourage student effort. This field quasi-experiment endows students with all of the points in the course upfront, then deducts points for each error throughout the semester. Exploiting two course sequences in the business school of a Midwestern university, a control for domain-specific knowledge, this study examines the impact of loss aversion when controlling for the student’s knowledge in a specific subject. This quasi-experiment indicates that students perform three to four percentage points better when controlling for student ability and domain knowledge (148 subjects). This result is significant at the 1% level in our most robust specification (p = 0.0020). This result is confirmed by a specification including four courses and controlling for student characteristics (217 subjects, p = 0.0190).


©American Psychological Association, 2019. This paper is not the copy of record and may not exactly replicate the authoritative document published in the APA journal. Please do not copy or cite without author's permission. The final article is available, upon publication, at:

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