What Is Loss aversion In Behavioral Economics?

In behavioral economics, loss aversion refers to the tendency of people to strongly prefer avoiding losses to acquiring gains. This means that they are more likely to take action to avoid a potential loss than to achieve a potential gain. For example, people are often more likely to sell a stock when it is down even if it means missing out on potential future gains, because the pain of the loss is more salient to them than the potential for gain. Loss aversion can lead to decision-making that is not entirely rational, as people may make decisions based on the fear of loss rather than a careful analysis of potential outcomes.In recent years, problems with loss aversion have come to light. You can read more about these problems in this article 

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