Behavioural Economics Primer: Loss aversion
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,...