Concept · Library
Concept · Psychology and behavioural economics (prospect theory) · 20th century
Loss aversion
Also known as Losses loom larger than gains · Prospect theory · Why losses hurt more
A model, framework or clinical approach that has been studied. Presented as a model, with what the research behind it actually found.
In prospect theory, people weigh what they might lose more heavily than an equal gain, and judge outcomes against where they are now rather than against their total wealth. The direction of the effect is well supported. The size of it varies a great deal between people and between situations, and the tidy claim that a loss always counts twice a gain is not what the later research shows.
Entries in this library keep the tradition label and the editorial state the source gave them. A record marked as awaiting scholarly review is offered as a lead to study, not as settled teaching.