Using loss aversion and framing to nudge students' classroom performance
Using loss aversion and framing to nudge students' classroom performance

Summary/Abstract: Behavioral economics suggests that people do not always decide rationally but are even predictably irrational. This gives rise to the concept of nudge, which creates an architecture of choices that encourages people to behave as they wish. Loss aversion is one of the best-known phenomena in behavioral economics and a central notion of the prospect theory. The main idea behind this phenomenon is that losses hurt more than gains feel good. The framing effect is a bias where people choose some options differently, depending on whether they are presented as a gain or a loss. In this quasi-experimental study, the authors examine the role of loss aversion and framing effects on students’ engagement and academic success. This study aims to test the hypothesis that students will have a stronger reaction to the reduction of awarded points, as opposed to an increase of awarded points, as they progress through the course. This will motivate them to work harder and achieve better academic success. The results show significant differences between the two groups in favor of the group being graded using the point reduction grading scheme. This suggests that the power of loss aversion can be exploited to increase students’ engagement and academic success. The existence of framing effect in this case has been demonstrated, which shows it might be possible to use the choice architecture to improve the student results.

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