This factor could affect the amount others think you should be compensated
You could be better off getting mugged with an empty wallet than with a $50 bill.
So suggests a new study from the University of Chicago’s Booth School of Business, where researchers found laypeople were inclined to award less compensation to victims if they endured an emotional loss coupled with trivial or no economic loss than if they suffered both an emotional loss plus a “small economic loss.”
The series of experiments — using participants from Amazon Mechanical Turk and published in the journal Organizational Behavior and Human Decision Processes — posed scenarios involving harassment, a car accident, a mugging at gunpoint and college students taking part in an “emotionally distressing study.” The presence of an economic loss, the authors found, “crowded out” emotional loss when determining total compensation.
“Unlike an economic loss, emotional loss is hard to evaluate and prone to biases,” study co-author Christopher Hsee said in a statement. “When a victim incurs only an emotional loss, people will base compensation on how much they feel the emotional loss is worth. But if the victim also incurs an economic loss, people will anchor on that measurable economic loss and make their compensation decision based on that amount.” (In scenarios involving a “trivial” loss like $1, these laypeople — who in practical terms could be mediators or jurors — treated them as if there was no economic loss.)
The study went on to suggest victims seeking compensation for emotional and economic losses should “refrain from mentioning economic losses unless the economic losses are large.”
“It would be better to say ‘I was so scared that I lost two nights’ sleep’ than to say ‘I was so scared that I lost two nights’ sleep and one day’s work,’” the authors wrote. “If the victim mentions one day’s work, the mediator would likely compensate the victim for only her one day’s pay. If the victim does not mention one’s day work, the mediator would likely award more, unless the victim has a high-paying job and the judge is aware of it.”
The study’s overall headline “makes some sense,” UC Hastings professor of law David Levine told Moneyish, but “it would be a more compelling study if they had tied it more closely to the realities of tort law.” “If you look at the reality of the law, if you didn’t have that small pecuniary (monetary) loss, you might not be able to bring that claim at all,” he said.
There are two ways to prove emotional distress damages, added attorney Eric Bachman, who handles employment discrimination cases for Zuckerman Law: taking a “more generalized approach” in which you, your friends or family testify that you’ve suffered experiences like sleepless nights, heightened anxiety, strained home life or reputational harm; or providing evidence of a diagnosed psychiatric condition for which you’ve sought professional treatment. That first case, Bachman said, is “where the results of that study are probably more likely to play out.”
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