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Loss aversion impacts risk perception from "summary" of Thinking Fast and Slow by Book Summary
Loss aversion is a powerful psychological phenomenon that influences the way we perceive risks. People tend to weigh potential losses more heavily than potential gains, often making decisions based on avoiding losses rather than seeking gains. This bias can have a significant impact on how we perceive risks in various situations. When faced with a risky choice, individuals are more likely to focus on what they stand to lose rather than what they could gain. This can lead to a distorted perception of risk, as the fear of losing often outweighs the potential benefits of taking a risk. For example, someone may be more hesitant to invest in a new venture if they are primarily focused on the possibility of losing money rather than the potential for fi...
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