Loss Aversion Quotes

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Loss Aversion Quotes

This mindset, known as loss aversion, the sunk-cost fallacy, and throwing good money after bad, is patently irrational, but it is surprisingly pervasive in human decision-making.65 People stay in an abusive marriage because of the years they have already put into it, or sit through a bad movie because they have already paid for the ticket, or try to reverse a gambling loss by doubling their next bet, or pour money into a boondoggle because theyve already poured so much money into it. Though psychologists dont fully understand why people are suckers for sunk costs, a common explanation is that it signals a public commitment. The person is announcing: "When I make a decision, Im not so weak, stupid, or indecisive that I can be easily talked out of it." In a contest of resolve like an attrition game, loss aversion could serve as a costly and hence credible signal that the contestant is not about to concede, preempting his opponents strategy of outlasting him just one more round.
— Steven Pinker —

Time and again, we let the fear of loss overpower rational decision-making and often make ourselves worse off just to avoid a potential loss. Psychologists call this loss aversion, and it means we often tend to prefer avoiding losses at the expense of acquiring gains.

— L. Jon Wertheim

Loss aversion is a powerful conservative force that favors minimal changes from the status quo

— Daniel Kahneman

The concept of loss aversion is certainly the most significant contribution of psychology to behavioral economics.

— Daniel Kahneman

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