Loss aversion

Loss aversion is an extremely complex behavioural bias in which people express both risk aversion and risk seeking behaviour. Put simply, #losses loom larger than #gains. This means that we place a larger value on losing something than on gaining something of an equal magnitude. (A useful concept to #understand about yourself!)

The 15 psychological studies that help explain how your audience acts on social media and how to get the most out of the way you share with them.

Loss aversion is a cognitive bias that suggests that for individuals the pain of losing is psychologically twice as powerful as the pleasure of gaining.

Learn how loss aversion bias in trading affects decisions and profits. Discover in-depth strategies to overcome it and achieve consistent trading success.

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It is often used by marketers to influence consumer decisions. 1. Free Shipping: Many retailers offer free shipping as a way to entice customers to make a purchase. Customers are less likely focus on the cost of the item due to the perceived loss of not taking advantage of the free shipping. 2. Discounts: By offering a discount, customers are more likely to purchase the item due to the perceived loss of not taking advantage of the discount.

Imagine you got a letter from your bank indicating that they made an error to undercharge you, and now you have to pay a bill for $1,000. How do you feel? What could you have done with the money? How long will this feeling of loss linger?

Dan Kahneman and Amos Tversky’s behavioural economics theory modeling how we make decisions. It illustrates, among other things, some of the non-rational…

It's just human nature to resist change, but it's even harder to decide to let things go, even if they don't serve us in our current season in life. In this blog, I talk about what loss aversion is, and especially how it can impact those undergoing a downsizing transition. How we prioritize and put value into gain over risk is also part of the process,. I'll also give you 3 steps to making better decisions so you, or a loved one, can feel less stressed and overwhelmed.

📈💰 Timing matters! If you sell low, you might lose. But buying when prices are down can lead to future gains. 🚀 It's like snagging a deal on stocks! 💹💡 #InvestingTips #BuyLowSellHigh 📊🌟

Loss aversion teaches us that if we want to convince someone of something, we shouldn't focus on the advantages. Rather highlight how it will help them avoid the disadvantages.

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Suppose you find a $50 bill on the street one day, and on another day, you lose a $50 bill from your wallet. The frustration and disappointment of losing $50 will likely be much stronger than the happiness of finding the same amount.

In theory, companies create value for stakeholders by making risky investments. In practice, however, managers in large corporations routinely quash risky ideas in favor of marginal improvements, cost-cutting, and “safe” investments. Why are managers in large, hierarchical organizations so risk-averse? Corporate incentives and control processes actively discourage managers from taking risks. Whereas CEOs consider each investment in the context of a greater portfolio, managers essentially bet…

Food aversion in pregnancy is very common. You might not feel like eating at all or find the smells of certain foods extremely unpleasant. https://garypryor.net/dealing-with-loss-of-appetite-in-pregnancy-by-gary-pryor/

“The irony of obsessive loss aversion is that our worst fears become realized in our attempts to manage them.” – Daniel Crosby #trading #investing #portfolio

It’s not often I get that lump in my stomach but yesterday it happened. Assertio Holdings, an investment of mine, had a stellar first half of the year. They were cheap, growing, and just closed a deal reducing their risk and adding a potential multi-billion dollar product to their repertoire. As I sat down to [...] The post Loss Aversion and Action Bias Unmasked appeared first on HIT Investments.

Loss aversion is twice as effective as a positive reward system - infographic