loss aversion

Definition

The tendency for individuals to prefer avoiding losses rather than accruing gains. The theory was first introduced in 1979 by Kahneman and Tversky under the assumption that losses have a larger impact on preferences than that of the advantages of gains.

Use loss aversion in a sentence

You should always do your best to be on the right side of loss aversion so that you are going the right way.

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We liked our loss aversion strategy because it worked well for us in the past and would in the future as well.

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All of his friends wanted him to go to the casino with them, but due to his loss aversion personality, he wasn't willing to risk the money for a potential gain.

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