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Loss Aversion

"losses loom larger than corresponding gains"

"In prospect theory, loss aversion refers to the tendency for people to strongly prefer avoiding losses than acquiring gains. Some studies suggest that losses are as much as twice as psychologically powerful as gains. Loss aversion was first convincingly demonstrated by Amos Tversky and Daniel Kahneman."
Loss aversion - Wikipedia

"The principle of loss aversion was first introduced by Kahneman and Tversky (1979)"

Tversky and Kahneman (1991) "The central assumption of the theory is that losses and disadvantages have greater impact on preferences than gains and advantages."

"Numerous studies have shown that people feel losses more deeply than gains of the same value (Kahneman and Tversky 1979, Tversky and Kahneman 1991)."
Goldberg and von Nitzsch (1999) pages 97-98

Hosted Papers

• OBEROI, Rishi, 2004. Men Behaving Badly: Irrationality in Decision Making When Defeat Becomes Hard to Accept.

Top 10 Papers

1. BENARTZI, S. and R.H. THALER, 1993. Myopic Loss Aversion and the Equity Premium Puzzle. [Cited by 463] (35.11/year)
2. TVERSKY, A. and D. KAHNEMAN, 1991. Loss Aversion in Riskless Choice: A Reference-Dependent Model. The Quarterly Journal of Economics. [Cited by 645] (42.47/year)
3. KAHNEMAN, D., J.L. KNETSCH and R.H. THALER, 1991. The Endowment Effect, Loss Aversion, and Status Quo Bias. Journal of Economic Perspectives. [Cited by 329] (21.66/year)
4. BARBERIS, N. and M. HUANG, 2001. Mental Accounting, Loss Aversion, and Individual Stock Returns. THE JOURNAL OF FINANCE. [Cited by 141] (27.19/year)
5. HARDIE, B.G.S., E.J. JOHNSON and P.S. FADER, 1993. Modeling Loss Aversion and Reference Dependence Effects on Brand Choice. Marketing Science. [Cited by 117] (8.87/year)
6. THALER, R.H., et al., 1997. The Effect of Myopia and Loss Aversion on Risk Taking: An Experimental Test. The Quarterly Journal of Economics. [Cited by 98] (10.67/year)
7. GENESOVE, D. and C. MAYER, 2001. LOSS AVERSION AND SELLER BEHAVIOR: EVIDENCE FROM THE HOUSING MARKET. Technology. [Cited by 111] (21.40/year)
8. KAHNEMAN, D., J.L. KNETSCH and R.H. THALER, 1991. The Endowment Effect, Loss Aversion, and Status Quo Bias: Anomalies. Journal of Economic Perspectives. [Cited by 62] (4.08/year)
9. BOWMAN, D., D. MINEHART and M. RABIN, 1999. Loss Aversion in a Consumption-Savings Model. Journal of Economic Behavior and Organization. [Cited by 76] (10.58/year)
10. LOCKE, P.R. and S.C. MANN, 1999. Do Professional Traders Exhibit Loss Realization Aversion?. manuscript, Division of Economic Analysis, Commodity Futures …. [Cited by 41] (5.71/year)

Recent Papers

• BATEMAN, I., et al., 2005. Testing Competing Models of Loss Aversion: An Adversarial Collaboration. Journal of Public Economics. [Cited by 7] (5.90/year)
• CAMERER, C., 2005. Three Cheers?Psychological, Theoretical, Empirical?for Loss Aversion. Journal of Marketing Research. [Cited by 4] (3.37/year)
• CHEN, M.K., V. LAKSHMINARAYANAN and L.R. SANTOS, 2006. How Basic Are Behavioral Biases? Evidence from Capuchin Monkey Trading Behavior. Journal of Political Economy. [Cited by 25] (72.85/year)
• GOMES, F., 2005. Portfolio Choice and Trading Volume with Loss-Averse Investors. Journal of Business. [Cited by 21] (17.70/year)
• HAIGH, M.S. and J.A. LIST, 2005. Do Professional Traders Exhibit Myopic Loss Aversion? An Experimental Analysis. The Journal of Finance. [Cited by 28] (23.60/year)
• HEIDHUES, P. and B. KOSZEGI, 2005. The Impact of Consumer Loss Aversion on Pricing. skylla.wz-berlin.de. [Cited by 10] (8.43/year)
• K?BBERLING, V. and P.P. WAKKER, 2005. An Index of Loss Aversion. Journal of Economic Theory. [Cited by 30] (25.29/year)
• LANGER, T. and M. WEBER, 2005. Myopic prospect theory vs. myopic loss aversion: How general is the phenomenon?. Journal of Economic Behavior and Organization. [Cited by 5] (4.21/year)
• NOVEMSKY, N. and D. KAHNEMAN, 2005. The Boundaries of Loss Aversion. Journal of Marketing Research. [Cited by 19] (16.02/year)
• SCHMIDT, U. and H. ZANK, 2005. What is Loss Aversion?. Journal of Risk and Uncertainty. [Cited by 5] (4.21/year)

Bibliography

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• BATEMAN, I., et al., 2005. Testing Competing Models of Loss Aversion: An Adversarial Collaboration. Journal of Public Economics. [Cited by 7] (5.90/year)
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• GENESOVE, D. and C. MAYER, 2001. LOSS AVERSION AND SELLER BEHAVIOR: EVIDENCE FROM THE HOUSING MARKET. Technology. [Cited by 111] (21.40/year)
• GOETTE, L., D. HUFFMAN and E. FEHR, 2004. Loss Aversion and Labor Supply. Journal of the European Economic Association. [Cited by 26] (11.89/year)
• GOMES, F., 2000. Loss aversion and the demand for risky assets. London Business School, working. [Cited by 13] (2.10/year)
• GOMES, F., 2005. Portfolio Choice and Trading Volume with Loss-Averse Investors. Journal of Business. [Cited by 21] (17.70/year)
• HAIGH, M.S. and J.A. LIST, 2005. Do Professional Traders Exhibit Myopic Loss Aversion? An Experimental Analysis. The Journal of Finance. [Cited by 28] (23.60/year)
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• HEIDHUES, P. and B. KOSZEGI, 2005. The Impact of Consumer Loss Aversion on Pricing. skylla.wz-berlin.de. [Cited by 10] (8.43/year)
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• K?BBERLING, V. and P.P. WAKKER, 2005. An Index of Loss Aversion. Journal of Economic Theory. [Cited by 30] (25.29/year)
• KAHNEMAN, D. and A. TVERSKY, 1991. Loss Aversion in Riskless Choice: A Reference-Dependent Model. Quarterly Journal of Economics. [Cited by 27] (1.78/year)
• KAHNEMAN, D., 2003. A Psychological Perspective on Economics. American Economic Review. [Cited by 38] (11.93/year)
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• KAHNEMAN, D., J.L. KNETSCH and R.H. THALER, 1991. The Endowment Effect, Loss Aversion, and Status Quo Bias: Anomalies. Journal of Economic Perspectives. [Cited by 62] (4.08/year)
• KAHNEMAN, D., J.L. KNETSCH and R.H. THALER, 1991. The Endowment Effect, Loss Aversion, and Status Quo Bias. Journal of Economic Perspectives. [Cited by 329] (21.66/year)
• KAHNEMAN, D., J.L. KNETSCH and R.H. THALER, 1991. The Endowment Effect. Loss Aversion. [Cited by 3] (0.20/year)
• KALYANARAM, G. and R.S. WINER, 1995. Empirical Generalizations from Reference Price Research. Marketing Science. [Cited by 89] (7.96/year)
• KAUSTIA, M., 2000. Can loss aversion move the market? Evidence from IPO trading volume,". Unpublished Working Paper, Helsinki School of Economics. [Cited by 5] (0.81/year)
• LANGER, T. and M. WEBER, 2005. Myopic prospect theory vs. myopic loss aversion: How general is the phenomenon?. Journal of Economic Behavior and Organization. [Cited by 5] (4.21/year)
• LEVY, J.S., 1996. Loss Aversion, Framing, and Bargaining: The Implications of Prospect Theory for International …. International Political Science Review/ Revue internationale …. [Cited by 18] (1.77/year)
• LEVY, J.S., 2000. Loss Aversion, Framing Effects, and International Conflict: Perspectives from Prospect Theory. Handbook of War Studies II. [Cited by 15] (2.42/year)
• LIEN, D., 2001. A note on loss aversion and futures hedging. Journal of Futures Markets. [Cited by 11] (2.12/year)
• LOCKE, P.R. and S.C. MANN, 1999. Do Professional Traders Exhibit Loss Realization Aversion?. manuscript, Division of Economic Analysis, Commodity Futures …. [Cited by 41] (5.71/year)
• MCCUSKER, C. and P.J. CARNEVALE, 1995. Framing in Resource Dilemmas: Loss Aversion and the Moderating Effects of Sanctions. Organizational Behavior and Human Decision Processes. [Cited by 26] (2.32/year)
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• NINCIC, M., 1997. Loss Aversion and the Domestic Context of Military Intervention. Political Research Quarterly. [Cited by 12] (1.31/year)
• NOVEMSKY, N. and D. KAHNEMAN, 2005. The Boundaries of Loss Aversion. Journal of Marketing Research. [Cited by 19] (16.02/year)
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• SCHMIDT, U. and H. ZANK, 2005. What is Loss Aversion?. Journal of Risk and Uncertainty. [Cited by 5] (4.21/year)
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