In cognitive science and behavioral economics, loss aversion refers to a cognitive bias in which the same situation is perceived as worse if it is framed as a loss, rather than a gain. [1][2] It should not be confused with risk aversion, which describes the rational behavior of valuing an uncertain outcome at less than its expected value.

Apr 26, 2024 · Loss aversion is the observation that human beings experience losses asymmetrically more severely than equivalent gains. This overwhelming fear of loss can cause investors...

Mar 8, 2018 · The loss aversion is a reflection of a general bias in human psychology (status quo bias) that make people resistant to change. So when we think about change we focus more on what we might lose...

Loss aversion is a cognitive bias that explains why individuals feel the pain of loss twice as intensively as the equivalent pleasure of gain. As a result of this, individuals tend to try to avoid losses in whatever way possible.

Nov 29, 2018 · Loss aversion is a central element of prospect theory, the dominant theory of decision making under uncertainty for the past four decades, and refers to the overweighting of potential losses relative to equivalent gains, a critical determinant of risky decision making.

In 1979 psychologists Amos Tversky and Daniel Kahneman developed a successful behavioral model, called prospect theory, using the principles of loss aversion, to explain how people assess...

Loss aversion is a cognitive bias that refers to the tendency of individuals to strongly prefer avoiding losses rather than acquiring equivalent gains. Put simply, people feel the pain of losing more intensely than the pleasure of winning, and this can significantly influence their decision-making processes.

Loss aversion is an important concept associated with prospect theory and is encapsulated in the expression “losses loom larger than gains” (Kahneman & Tversky, 1979). It is thought that the pain of losing is psychologically about twice as powerful as the pleasure of gaining.

Oct 15, 2021 · Accordingly, this paper summarizes the process and boundary conditions of loss aversion in decision-making under risk, considering four distinct approaches: the absolute magnitude of losses, the bias of attentional allocation, the ranking of losses relative to gains, and the preference for inaction.

Sep 14, 2024 · Loss aversion is a cognitive bias that describes our tendency to prefer avoiding losses over acquiring equivalent gains. In simpler terms, we feel the pain of losing $100 more intensely than the pleasure of gaining $100.