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.

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:

1. Risk aversion – where we prefer an assured outcome over a gamble with a higher expected outcome; and

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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...