The concept of loss aversion

Loss aversion is a psychological tendency where people feel the pain of losing something more strongly than the pleasure of gaining something of similar value. For example, losing $100 hurts more than gaining $100 feels good. This bias influences decision-making, often leading individuals to avoid risks that could lead to losses, even if potential gains are reasonable. In essence, the fear of losing weighs more heavily on our minds than the prospect of gaining, shaping behaviors in finance, investment, and everyday choices.