Loss aversion, the idea that losses are more psychologically impactful than gains, is widely considered the most important idea of behavioral decision-making and its sister field of behavioral economics. To illustrate the importance loss aversion is accorded, Daniel Kahneman, winner of the 2002 Nobel Prize in economics, wrote in his More
If you’ve ever let unworn clothes clutter your closet just because they were expensive, or followed through on plans you were dreading because you already bought tickets, you’re familiar with the sunk cost fallacy. “The sunk cost effect is the general tendency for people to continue an endeavor, or continue More
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