Loss Aversion

Losses hurt roughly twice as much as equivalent gains feel good. We are more motivated to avoid losing what we have than to acquire something of equal value.

• The pain of losing $100 is felt approximately twice as intensely as the pleasure of winning $100.
• Tenants fight far harder to avoid being evicted from a home than they fought to acquire it in the first place.
• Companies resist cutting employee salaries (a loss) far more than they resist not giving raises (a foregone gain) — even when both have the same financial effect.