{"id":59677,"date":"2022-02-04T13:50:00","date_gmt":"2022-02-04T17:50:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=59677"},"modified":"2022-02-14T13:56:04","modified_gmt":"2022-02-14T17:56:04","slug":"loss-aversion-psychology","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/loss-aversion-psychology\/","title":{"rendered":"Understanding the Psychology of Loss Aversion"},"content":{"rendered":"\n<p><a href=\"https:\/\/www.shortform.com\/blog\/psychology-loss-aversion\/\">What is loss aversion<\/a>? Why does losing something have a stronger psychological impact compared to gaining something? <\/p>\n\n\n\n<p>As the name suggests, loss aversion is the tendency to have a stronger aversion to losing something compared to gaining something. Loss aversion is an evolutionary trait passed on from early humanity when losing something\u2014be it belongings, weapons, or food supply\u2014was often fatal. Being cautious and avoiding loss kept early humans alive and able to procreate, meaning their cautious genes survived to the current day.<\/p>\n\n\n\n<p>Keep reading to learn about the psychology of loss aversion.<\/p>\n\n\n\n<!--more-->\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-loss-aversion\"><strong>Loss Aversion<\/strong><\/h2>\n\n\n\n<p>Loss aversion is a fallacy in which <strong>people are affected far more strongly by loss than they are by gaining things. They consequently prioritize not losing things over gaining new things<\/strong>. Even when the things you lose and gain have the same value, you react to the loss twice as intensely as the gain.<\/p>\n\n\n\n<p> (Shortform note: Some people think the more you have, the less this tendency affects you because the loss isn\u2019t as important. This isn\u2019t the case. <a href=\"https:\/\/www.psychologytoday.com\/us\/blog\/science-choice\/201803\/what-is-loss-aversion#:~:text=Being%20wealthy%20doesn%E2%80%99t%20help.%20For%20rich%20people%2C%20the%20pain%20of%20losing%20their%20fortune%20exceeds%20the%20emotional%20gain%20of%20getting%20additional%20wealth%2C%20so%20the%20rich%20often%20become%20vulnerable%20and%20anxious.\">Rich people are just as anxious over losing their wealth or belongings as poor people<\/a>\u2014maybe more so, as they have more to lose.)<\/p>\n\n\n\n<p>According to psychology, loss aversion is an evolutionary trait passed down by ancient humans\u2014being loss-averse helped early humans to stay alive so they could procreate and pass on their genes.<\/p>\n\n\n\n<p>(Shortform note: Evolutionary instincts also determine which losses matter more to you. <a href=\"https:\/\/shortform.com\/app\/book\/poor-charlies-almanack\/25-psychological-biases-part-2\">Losing something you physically had hurts more than losing something you had in a more abstract way<\/a>. For example, losing $100 cash hurts more than losing $150 electronically, even though you lose more money electronically. Your brain sees the cash as more \u201creal\u201d and thus worse to lose because it hasn\u2019t evolved to deal with abstract, non-tangible items.)<\/p>\n\n\n\n<p><strong>People can use loss aversion to their advantage by framing their pitches negatively rather than positively<\/strong>, Dobelli says. If an ad says \u201cAct now or lose these savings forever!\u201d it&#8217;s twice as effective as an ad that says, \u201cAct now and get these savings!\u201d (Shortform note: <a href=\"https:\/\/www.psychologytoday.com\/us\/blog\/the-science-behind-behavior\/201906\/why-limited-time-offers-entice-shoppers-buy#:~:text=Once%20this%20customer,curiosity%20or%20enthusiasm.\">Negative pitches work by building anticipatory regret<\/a>: They make you imagine a loss and the feeling of regret that comes with that loss. These imagined feelings are strong enough to trigger loss aversion. Anticipatory regret is more effective at boosting sales than excitement or curiosity, making it a valuable tool for marketers.)<\/p>\n","protected":false},"excerpt":{"rendered":"<p>What is loss aversion? Why does losing something have a stronger psychological impact compared to gaining something? As the name suggests, loss aversion is the tendency to have a stronger aversion to losing something compared to gaining something. Loss aversion is an evolutionary trait passed on from early humanity when losing something\u2014be it belongings, weapons, or food supply\u2014was often fatal. Being cautious and avoiding loss kept early humans alive and able to procreate, meaning their cautious genes survived to the current day. Keep reading to learn about the psychology of loss aversion.<\/p>\n","protected":false},"author":7,"featured_media":54333,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[9,160],"tags":[576],"class_list":["post-59677","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-psychology","category-science","tag-the-art-of-thinking-clearly","","tg-column-two"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.3 (Yoast SEO v24.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Understanding the Psychology of Loss Aversion - Shortform Books<\/title>\n<meta name=\"description\" content=\"Loss aversion is when people are affected more strongly by loss than they are by gain. Learn about the psychology behind loss aversion.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.shortform.com\/blog\/loss-aversion-psychology\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Understanding the Psychology of Loss Aversion\" \/>\n<meta property=\"og:description\" content=\"Loss aversion is when people are affected more strongly by loss than they are by gain. Learn about the psychology behind loss aversion.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.shortform.com\/blog\/loss-aversion-psychology\/\" \/>\n<meta property=\"og:site_name\" content=\"Shortform Books\" \/>\n<meta property=\"article:published_time\" content=\"2022-02-04T17:50:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-02-14T17:56:04+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/s3.amazonaws.com\/wordpress.shortform.com\/blog\/wp-content\/uploads\/2021\/11\/losses.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"2000\" \/>\n\t<meta property=\"og:image:height\" content=\"2000\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Darya Sinusoid\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Darya Sinusoid\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.shortform.com\/blog\/loss-aversion-psychology\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/loss-aversion-psychology\/\"},\"author\":{\"name\":\"Darya Sinusoid\",\"@id\":\"https:\/\/www.shortform.com\/blog\/#\/schema\/person\/0421cce75bc249b11e2517b3a91f9c46\"},\"headline\":\"Understanding the Psychology of Loss Aversion\",\"datePublished\":\"2022-02-04T17:50:00+00:00\",\"dateModified\":\"2022-02-14T17:56:04+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/loss-aversion-psychology\/\"},\"wordCount\":406,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/#organization\"},\"image\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/loss-aversion-psychology\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.shortform.com\/blog\/wp-content\/uploads\/2021\/11\/losses.jpg\",\"keywords\":[\"The Art of Thinking Clearly\"],\"articleSection\":[\"Psychology\",\"Science\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.shortform.com\/blog\/loss-aversion-psychology\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.shortform.com\/blog\/loss-aversion-psychology\/\",\"url\":\"https:\/\/www.shortform.com\/blog\/loss-aversion-psychology\/\",\"name\":\"Understanding the Psychology of Loss Aversion - Shortform Books\",\"isPartOf\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/loss-aversion-psychology\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/loss-aversion-psychology\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.shortform.com\/blog\/wp-content\/uploads\/2021\/11\/losses.jpg\",\"datePublished\":\"2022-02-04T17:50:00+00:00\",\"dateModified\":\"2022-02-14T17:56:04+00:00\",\"description\":\"Loss aversion is when people are affected more strongly by loss than they are by gain. 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