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.
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Similar ideas to Subjective magnitude
We make decisions based on the information that we have. However, we tend to be more reliant on the negative more than the positive. This causes two outcomes:
Risk aversion – where we prefer an assured outcome over a gamble with a higher expected outcome; and
...People weigh negative information more than positive information.
According to revolutionary work by Kahneman and Tvetsky, we treat the same monetary values differently, depending on whether they are gains or losses. This is called loss aversion.
We have this bias because our ancest...
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