Loss Aversion

People suffer more from a loss than they enjoy a gain of the same magnitude. This asymmetry is called loss aversion, is central to the Prospect Theory and it may explain why consumers and investors are less willing to take risks when winning, but more risk-prone when losing.

The pain of a loss hurts twice as much as the happiness of a win.

Also relates to: Reference Dependence · Aversion to Ambiguity · Conservatism · Hyperbolic Discounting · Narrow Framing · Myopic Loss Aversion

Myopic Loss Aversion

Myopic loss aversion involves evaluating gains or losses over very short timeframes, while being more sensitive to the latter (in line with Loss Aversion).