Lost Aversion

Loss aversion is a psychological tendency where people experience the discomfort of losing something more strongly than the pleasure of gaining something of equal value. In other words, losing $100 feels worse than the satisfaction of gaining the same amount. This bias influences decision-making, often leading individuals to avoid risks that might result in losses, even if the potential gains are significant. It helps explain behaviors like holding onto failing investments or being reluctant to sell items at a loss. Recognizing loss aversion can improve understanding of economic choices and strategic planning.