Loss aversion makes us riskaverse from "summary" of Thinking, Fast and Slow by Daniel Kahneman
Loss aversion is a powerful psychological force that influences our decision-making. It refers to the tendency for people to strongly prefer avoiding losses over acquiring gains of equal value. This cognitive bias is deeply ingrained in human nature and impacts various aspects of our lives, including how we approach risk.
When faced with a decision that involves potential loss, our minds react more strongly than they would to an equivalent opportunity for gain. This asymmetry in our emotional response leads us to be more risk-averse when considering choices that could result in losses. The fear of losing something we already possess often outweighs the potential benefits of taking a risk.
This aversion to losses can have significant implications for our behavior, particularly in areas such as investments, gambling, and career decisions. People tend to be more cautious when th...
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