Title: Loss aversion - Economics Help
Headings: Loss aversion
Loss aversion
“losses loom larger than gains” (Kahneman & Tversky, 1979)
Loss aversion and prospect theory
Loss aversion and mental accounting
Loss aversion and marketing
Reasons for loss aversion
Scholarly studies on loss aversion
Related concepts

Content: However, if the software is not working and giving consistently high marginal costs – it is better to ditch. But, we have an aversion to writing off as a loss a significant project. Loss aversion and marketing
Free trial periods. Firms can take advantage of loss aversion through offering free trial periods. Once a consumer has the product, it becomes much more willing to give up something it has got used to. So for example, a supermarket may offer a free month trial for free delivery – when we get used to free delivery of groceries, we don’t want to give up so are willing to pay. Reasons for loss aversion
Attachment to objects/decision. If we own something, we can develop an attachment/relationship. If a family member gave us a statue worth £100, we might feel bad about selling – even if someone offered us £200. However, if we saw the exact same statue in the shop, we may not want to pay even £10.