Good read on the 1st day of the year! I’m usually thinking analytically but intuition embedded. I puzzle on not fitting case. Per loss aversion, as a parent, I intentionally not count as loss what I give to my kids, now young adults, as long as I could. I get satisfaction from giving for them and that matters more than $. There are certain commitments that are difficult to categorize as “loss” vs. “gain” in our life like parenting. But, beyond that, I think this is a powerful concept. Thanks for sharing!
Interesting. It brings up several questions, some of which may have already been answered by research that I am not aware of. Such as, is there a cultural component to loss aversion or perception? In other words, would certain cultures or people have more loss with certain aspect of their lives (time, money, heirlooms)?
And what part of loss aversion might be genetic vs environmental? If genetic, then one would expect some variation in a population.
Good read on the 1st day of the year! I’m usually thinking analytically but intuition embedded. I puzzle on not fitting case. Per loss aversion, as a parent, I intentionally not count as loss what I give to my kids, now young adults, as long as I could. I get satisfaction from giving for them and that matters more than $. There are certain commitments that are difficult to categorize as “loss” vs. “gain” in our life like parenting. But, beyond that, I think this is a powerful concept. Thanks for sharing!
How wonderful to shake my mind with a great thought written! Thank you John!
What about the incentives from the lost- non monetary(?) by not taking the risk.
Post more John. I enjoy your work.
Interesting. It brings up several questions, some of which may have already been answered by research that I am not aware of. Such as, is there a cultural component to loss aversion or perception? In other words, would certain cultures or people have more loss with certain aspect of their lives (time, money, heirlooms)?
And what part of loss aversion might be genetic vs environmental? If genetic, then one would expect some variation in a population.
Good questions!
There is some evidence that loss aversion has a genetic component:https://psycnet.apa.org/record/2015-48751-001
And some evidence on the influence of culture on loss aversion:https://onlinelibrary.wiley.com/doi/abs/10.1002/bdm.1941