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Loss aversion

The tendency for losses to influence choices more strongly than equivalent gains.

Published 04 August 2026Updated 04 August 2026

Loss aversion can make people reject fair risks, hold failing options, or respond differently to equivalent gain and loss frames. Evaluate future outcomes from a consistent reference point rather than letting the pain of a possible loss dominate automatically.

Sources

Prospect Theory: An Analysis of Decision under Risk

Econometrica / 1979 / Paper

Reference for loss aversion and framing effects.