Difference between revisions of "Loss aversion"

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(See also: link to Sunk cost fallacy)
 
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'''Loss aversion''' is [[risk aversion]]'s evil twin. A loss-averse agent tends to avoid uncertain gambles, not because every unit of money brings him a bit less utility, but because he weighs losses more heavily than gains, always treating his current level of money as somehow special.
  
Loss aversion is [[risk aversion]]'s evil twin. A loss-averse agent tends to avoid uncertain gambles, not because every unit of money brings him a bit less utility, but because he weighs losses more heavily than gains, always treating his current level of money as somehow special.
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==Blog posts==
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*[http://lesswrong.com/lw/13i/shut_up_and_guess/ Shut Up And Guess] by [[Yvain]]
  
 
==See also==
 
==See also==
* [[prospect theory]]
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* [[risk aversion]]
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*[[Prospect theory]]
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*[[Risk aversion]]
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*[[Sunk cost fallacy]]
  
 
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[[Category:Prospect theory]]

Latest revision as of 05:56, 5 February 2010

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Loss aversion is risk aversion's evil twin. A loss-averse agent tends to avoid uncertain gambles, not because every unit of money brings him a bit less utility, but because he weighs losses more heavily than gains, always treating his current level of money as somehow special.

Blog posts

See also