Behavioural Economics Primer: Loss Aversion

This article provides an overview of the behavioural economics concept of loss aversion, the tendency to feel the pain of loss more than the pleasure of equal gain.

Behavioural Economics Primer: Loss aversion

Crawford Hollingworth The Behavioural Architects

Behavioural economics

This article is part of Warc's Behavioural Economics Primer.

Loss aversion is a cognitive bias which describes the way in which we feel the pain of a loss more than the pleasure of an equal gain. This means that we value more highly what we already have than that which we stand to gain.

To agree to a gamble with a 50-50 chance of winning or losing, generally speaking, most people would need to gain twice as much as they stand to lose. For instance,...

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