The Influence of Losses on Mental Effort and Performance

This study examines the varying effects of potential losses compared to gains on mental effort and problem-solving performance. Building on prospect theory and previous studies, we hypothesized that individuals would engage in longer effort when faced with potential losses compared to equivalent potential gains, and that this extended effort would enhance problem-solving performance, particularly in more challenging tasks. Two experimental studies were conducted. Study 1 established that participants persisted longer in tasks designed to avoid monetary losses than to achieve gains, confirming the hypothesis regarding prolonged effort. However, this increased persistence did not translate into better performance across various tasks, suggesting that losses encourage mental effort but do not inherently improve problem-solving efficacy. Study 2, which employed anagrams of varying difficulty, revealed that losses indeed correlated with longer persistence times but only improved performance in tasks deemed more difficult. These findings indicate that the effect of losses on performance is nuanced, highlighting the importance of task difficulty and the sensitivity of performance measures in understanding the interactions between loss aversion and cognitive processing. Overall, the results suggest that while losses prompt greater cognitive engagement, their influence on performance is contingent on task complexity, necessitating further exploration into the conditions under which losses enhance mental effort and problem-solving capabilities.