Loss aversion explains why incumbents win except during bad times.

Evidence

We have seen that the combination of risk aversion for gains and risk seeking for losses is consistent with incumbency-oriented voting: incumbents profit from good times, and challengers from bad times. We wish to point out that loss aversion is consistent with another widely accepted generalization, namely that the incumbent enjoys a distinct advantage over the challenger. This effect is frequently attributed to such advantages of holding office as that of obtaining free publicity while doing one’s job and being perceived by voters as more experienced and effective at raising funds (Kiewiet, 1982). To these considerations, the present analysis of choice adds the consequences of the value function. Because it is natural to take the incumbent’s policy as the status quo—the reference point to which the challenger’s policy is compared—and because losses loom larger than gains, it follows that the incumbent enjoys a distinct advantage. As we argued earlier, the introduction of risk or uncertainty also tends to favor the incumbent under conditions that enhance risk aversion; that is, when the general conditions are good or even acceptable, voters are likely to play it safe and opt for the relatively riskless incumbent. Only when conditions become unacceptable will the risky challenger capture an edge. Hence, the properties of the value function are consistent with the generally observed incumbency effects, as well as with the exceptions that are found during hard times. — John T. Jost and Jim Sidanius, Political Psychology, 2450

Categorization

• XREF: Links prospect theory’s loss aversion to voter behavior — connects to the broader literature on framing effects and status-quo bias. — connects to: Incumbency-oriented voting results from risk asymmetry, not merely punishment. — John T. Jost and Jim Sidanius, Political Psychology: Key Readings, 2440; Risky challengers win bad-time votes despite equal expected value. — John T. Jost and Jim Sidanius, Political Psychology: Key Readings, 2441