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).

NoteExample

Myopic loss aversion can explain why investors are quick to sell when gaining (and thus accept a win) while holding their positions when losing (and thus refusing to accept a loss), also know as the “disposition effect”.

“I’ll sell, just to be on the safe side”.

Also relates to: Loss Aversion · Narrow Framing · Aversion to a Sure Loss · Reference Dependence · Gambler’s Fallacy