Loss aversion
From Lesswrongwiki
Revision as of 05:56, 5 February 2010 by Vladimir Nesov (talk | contribs) (→See also: link to Sunk cost fallacy)
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.
