Loss aversion

Loss aversion is the finding that a loss tends to feel stronger than a gain of the same size. It is a core idea of prospect theory, set out by Daniel Kahneman and Amos Tversky in 1979, and the often-quoted rule of thumb is that losses weigh roughly twice as much as gains, although the exact ratio varies between people and situations, and researchers still debate it. It helps explain why people hold losing investments, reject fair bets and dislike changing the status quo. This page gathers our articles, quizzes and videos on loss aversion, with the research behind each claim.