Loss Aversion
Losses are felt more powerfully than equivalent gains.
Loss aversion is the tendency to prefer avoiding losses to acquiring equivalent gains: it is better to not lose $5 than to find $5. The principle was first proposed by Kahneman and Tversky as part of prospect theory. Some studies have suggested that losses are twice as psychologically powerful as gains. Loss aversion can lead to poor investment decisions (holding losing stocks too long to avoid 'locking in' a loss) and excessive risk avoidance.
What it looks like in the wild.
- Everyday life Stock Market Selling Investors hold losing stocks far longer than winning stocks because selling a loser means admitting a loss, while selling a winner feels good.
Someone has already built a business on this.
Biases are not only private errors. They are design targets — patterns deliberately engineered into interfaces because they reliably work.
- E-commerce Cart Abandonment Loss Framing Cart abandonment emails say 'Don't lose your items' rather than 'Come back to your cart', framing inaction as a loss to trigger loss aversion.
- Games Daily Reward Streaks Daily login reward streaks exploit loss aversion: missing a day means 'losing' your streak progress, driving compulsive daily engagement.
Recognising a definition is not the same skill as spotting it.
Two scenarios from the app, with distractors drawn from the same family of biases — which is what makes them hard.
Alex refuses to sell his old, reliable car for a good price. He worries about the hassle of finding a new one and the chance of getting a lemon.
Jake refuses to return a defective appliance for a full refund, insisting on a complicated repair process because 'it's mine now'.
Biases rarely arrive alone.
Understand more. Assume less.
188 biases, 18,869 scenarios, and a record of how you actually decide.
Get Debias on Google Play