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Loss aversion - BehavioralEconomics.com | The BE Hub
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Definition of loss aversion, a central concept in prospect theory and behavioral economics.
Loss aversion - BehavioralEconomics.com | The BE Hub Skip to content Loss aversion Loss aversion BehavioralEconomics.com 2024-12-04T07:15:53+00:00 Loss aversion is an important concept associated with prospect theory and is encapsulated in the expression “losses loom larger than gains” (Kahneman & Tversky, 1979). It is thought that the pain of losing is psychologically about twice as powerful as the pleasure of gaining. People are more willing to take risks (or behave dishonestly ; e.g. Schindler & Pfattheicher, 2016) to avoid a loss than to make a gain. Loss aversion has been used to explain
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