Loss Aversion & Its Impact - Deepstash
Loss Aversion & Its Impact

Loss Aversion & Its Impact

Loss aversion is the tendency to prefer avoiding losses rather than acquiring gains. It’s a fundamental principle that influences many decisions.

“We fear loss more than we value gain, which often drives our decision-making.”

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Similar ideas to Loss Aversion & Its Impact

Loss aversion refers to our tendency to strongly prefer avoiding losses over acquiring gains.

Subjective magnitude

We weigh negatives twice as heavily as positives. This is similar to loss aversion: We prefer avoiding losses than acquiring equivalent gains.

Loss aversion focuses narrowly on losses and gains, however, while subjective magnitude broadly considers positive and negative events.

Emotional decision failure

Emotional decision failure

Our decisions are often altered by two subtle short-term emotions:

  1. mere exposure to things we are used to: we like what’s familiar to us
  2. loss aversion: losses are more painful than gains are pleasant.

Loosing sucks and we subconscio...

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