Title: What is something that behavioral economics explains clearly? - Quora
Headings: What is something that behavioral economics explains clearly?
What is something that behavioral economics explains clearly?
Shubham Agarwal
Quora User

Content: In other words, people valued the mug twice as much once they already owned it. The evolutionary basis for this heuristic device is obvious -- a bird in the hand is worth two in the bush, and in human evolution the certainty of possessing something mattered a lot. But in today's marketplace where items can be verified as identical, this heuristic creates a valuation error that causes people to overpay to retain some items and underpay to acquire others. Sponsored by USAFacts
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Steve Shu
, Author of Nudging Democratized, www.InsideNudging.com
Answered 5 years ago · Author has 1.3K answers and 3.2M answer views
Loss aversion is something that I consider to be part of the "behavioral economics" realm and clearly demonstrable across people (although differences among individuals varies widely). Basically 1 is not the same as 2 minus 1, although traditional economics would state that both cases are equivalent. You may have heard the phrase that "losses loom larger than gains." People experience losses on average 2-2.5 times more strongly than gains. You can look at the foundational research of Kahnemann and Tversky.