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Loss Aversion

Edited by steven0461, Vladimir_Nesov, PeerInfinity last updated 4th Feb 2010

Loss aversion is risk aversion's evil twin. A loss-averse agent tends to avoid uncertain gambles, not because every unit of money brings him a bit less utility, but because he weighs losses more heavily than gains, always treating his current level of money as somehow special.

Blog posts

  • Shut Up And Guess by Yvain

See also

  • Prospect theory
  • Risk aversion
  • Sunk cost fallacy

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