Loss aversion

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