Can we explain the tendency of investors dollar cost averaging in terms of loss aversion?
It seems that despite the idea's intuitive appeal, the evidence is currently mixed with respect to whether loss aversion can explain dollar cost averaging strategies. Most research I can find seems to be financial and normative, pertaining to whether the strategy performs well more than behavioral and descriptive concerns for why people engage in the strategy. 

An uncommonly direct study of this exact question reported, in no uncertain terms, that we cannot explain the tendency of investors dollar cost averaging in terms of loss aversion (Leggio and Lien, 1995).


  Using prospect theory to create an alternative utility function that does not require investors to be strictly risk averse, we empirically test Statman’s conjecture for four investment strategies and for alternative stock investments. We find loss aversion still does not explain the existence of the dollar-cost averaging investment strategy.


Unfortunately, at least for our sense of certainty, this claim was challenged in a later study by Dicht and Drobetz (2011), which suggested the exact opposite: according to them, prospect theoretic can explain dollar cost averaging strategies with loss aversion within short time scales.


  Overall, our results indicate that the popularity of dollar cost averaging can be explained within the framework of the Tversky and Kahneman’s cumulative prospect theory, at least for short time horizons.


There seems to be a complex, time-dependent relationship between dollar cost averaging and loss aversion. It's plausible that loss aversion drives the tendency to engage in dollar cost averaging over particular time scales or for particular classes of investors, but ultimately, we don't have the evidence to say.

References


Leggio, K. B., &amp; Lien, D. (2001). Does loss aversion explain dollar-cost averaging?. Financial Services Review, 10(1), 117-127.
Dichtl, H., &amp; Drobetz, W. (2011). Dollar-cost averaging and prospect theory investors: An explanation for a popular investment strategy. Journal of Behavioral Finance, 12(1), 41-52.