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Are you reading the same article as me? As they mentioned: > Loss aversion has been represented as a fundamental principle. Loss aversion is not understood as

Are you reading the same article as me? As they mentioned: > Loss aversion has been represented as a fundamental principle. Loss aversion is not understood as the idea that losses can or sometimes loom larger than gains, but that losses inherently, perhaps inescapably, outweigh gains. For example, Kahneman, Knetch, and Thaler (1990, p. 1326) describe loss aversion as "the generalization that losses are weighted substantially more than objectively commensurate gains." In a similar fashion, other researchers do not qualify the idea of loss aversion; Tversky and Kahneman (1986, p. S255) state that "the response to losses is more extreme than the response to gains;" and Kahneman and Tversky (1984, p. 342) state "the value function is … considerably steeper for losses than for gains." The authors are refuting "loss aversion" as Kahneman et al is describing it. > (i.e. they don't present an alternative theory to explain the papers that purport to demonstrate "loss aversion") Why do they need to? The paper isn't about trying to explain when losses or gains are most impactful; the paper is about whether or not there's a clear tendency.

vezycash 8y ago
Big words don't count as evidence. The article brings absolutely no new information to the table. Heck, I think this article's a clickbait. The basic principle behind loss aversion is simple. What's the primary motive behind an action - Running away or running towards? Prevention or gain. For instance. Yesterday an article about American child care was on HN. American parents are acting primarily to PREVENT injury, discomfort or death of their children. That's action motivated by loss aversion. Japanese, maya parents still want safety for their children but independence of their kids is a primary motivator for their action. In other words gain. I think the author is confused about something. I want more money and I don't want to lose the ones I have. Both feelings aren't mutually exclusive. However at the point of decision I could be swayed more by greed or by fear. If a site, seller or investment is shady, fear wins. I'll protect myself. If not, greed or gain could win in that instance. I could speed down towards a party one moment. And a near miss could make me reconsider and slow down. Both modes occurred on the same journey. No grammar by some clickbaity author would change that.
- judofyr 8y ago
  > The article brings absolutely no new information to the table. Did you read the paper? It's not a paper that "brings new information to the table", it's a paper which presents recent experiments and tries to show that there is little scientific evidence of loss aversion. > The basic principle behind loss aversion is simple. Huh? I don't understand what you're saying? You're saying that "loss aversion" is simple, but then you give examples of losses not being universally more impactful than gains? What you're describing here is exactly the point of the authors: Both modes are important > … swayed more by greed or by fear. And you should be aware that "loss aversion" is very careful to not talk about the psychological process behind. Loss aversion is not about greed, fear or any feeling and/or instinct. Loss aversion is a measurable effect. None of the papers that claim that loss aversion is a general principle claims that "greed is stronger than love" or anything similar to that. In fact, they are very "chicken" and just shrug it away.
  - vezycash 8y ago
    As complex as gravity and electricity are, the underlying principles are simple. Same with loss aversion. Money isn't the only or biggest motivator. Take a good common example of loss aversion - admitting being wrong. Why do people find it difficult to admit that they are wrong? What's at stake here? Reputation, respect, pride, even money. 100 scientists vs Einstein is a classic example of this. Pointless wars have been been fought because someone wouldn't admit being wrong. The Iraqi, Vietnam wars are good examples. Your reaction to this issue is another. Limiting loss aversion to just economic behavior betrays lack of understanding of the topic.
    - jkabrg 8y ago
      The arguments you made don't challenge what the article says one bit. The loss aversion hypothesis is the hypothesis that given the choice between either of the following two scenarios: - Having an object x and then risk losing it. - Being offered an object x but risk not getting it. people are more "motivated" by the first than by the second. The claim moreover is that: - This is a universal motivator, which means it must explain "economic behavior" (which you mention) as well as anything else. The fact that -- as the article says -- people prefer *keeping* a stock which is just as likely to lose in value as to gain, is a *perfect* example to illustrate that it is *not* a universal motivator. - That it is not rational. There are cases where losing something, like for instance money, is *truly* more damaging than gaining the equivalent amount of money. For example, if I lost $100,000 it would be much more devastating than if I gained $100,000 -- in this scenario, it's not a psychological *bias* but in fact a completely rational belief. This example is in the article. You can not use examples like this one to argue in favour of "loss aversion", because there would be no evidence of an irrational bias. Also, the fact that you keep applying the "loss aversion" hypothesis as broadly as possible, to things like wars and arguments, suggests you're assuming it applies everywhere. What about the stock example, which is mentioned in the article? That ought to prove you wrong, no?

vezycash 8y ago

Big words don't count as evidence. The article brings absolutely no new information to the table. Heck, I think this article's a clickbait. The basic principle behind loss aversion is simple. What's the primary motive behind an action - Running away or running towards? Prevention or gain. For instance. Yesterday an article about American child care was on HN. American parents are acting primarily to PREVENT injury, discomfort or death of their children. That's action motivated by loss aversion. Japanese, maya parents still want safety for their children but independence of their kids is a primary motivator for their action. In other words gain. I think the author is confused about something. I want more money and I don't want to lose the ones I have. Both feelings aren't mutually exclusive. However at the point of decision I could be swayed more by greed or by fear. If a site, seller or investment is shady, fear wins. I'll protect myself. If not, greed or gain could win in that instance. I could speed down towards a party one moment. And a near miss could make me reconsider and slow down. Both modes occurred on the same journey. No grammar by some clickbaity author would change that.

judofyr 8y ago
> The article brings absolutely no new information to the table. Did you read the paper? It's not a paper that "brings new information to the table", it's a paper which presents recent experiments and tries to show that there is little scientific evidence of loss aversion. > The basic principle behind loss aversion is simple. Huh? I don't understand what you're saying? You're saying that "loss aversion" is simple, but then you give examples of losses not being universally more impactful than gains? What you're describing here is exactly the point of the authors: Both modes are important > … swayed more by greed or by fear. And you should be aware that "loss aversion" is very careful to not talk about the psychological process behind. Loss aversion is not about greed, fear or any feeling and/or instinct. Loss aversion is a measurable effect. None of the papers that claim that loss aversion is a general principle claims that "greed is stronger than love" or anything similar to that. In fact, they are very "chicken" and just shrug it away.
- vezycash 8y ago
  As complex as gravity and electricity are, the underlying principles are simple. Same with loss aversion. Money isn't the only or biggest motivator. Take a good common example of loss aversion - admitting being wrong. Why do people find it difficult to admit that they are wrong? What's at stake here? Reputation, respect, pride, even money. 100 scientists vs Einstein is a classic example of this. Pointless wars have been been fought because someone wouldn't admit being wrong. The Iraqi, Vietnam wars are good examples. Your reaction to this issue is another. Limiting loss aversion to just economic behavior betrays lack of understanding of the topic.
  - jkabrg 8y ago
    The arguments you made don't challenge what the article says one bit. The loss aversion hypothesis is the hypothesis that given the choice between either of the following two scenarios: - Having an object x and then risk losing it. - Being offered an object x but risk not getting it. people are more "motivated" by the first than by the second. The claim moreover is that: - This is a universal motivator, which means it must explain "economic behavior" (which you mention) as well as anything else. The fact that -- as the article says -- people prefer *keeping* a stock which is just as likely to lose in value as to gain, is a *perfect* example to illustrate that it is *not* a universal motivator. - That it is not rational. There are cases where losing something, like for instance money, is *truly* more damaging than gaining the equivalent amount of money. For example, if I lost $100,000 it would be much more devastating than if I gained $100,000 -- in this scenario, it's not a psychological *bias* but in fact a completely rational belief. This example is in the article. You can not use examples like this one to argue in favour of "loss aversion", because there would be no evidence of an irrational bias. Also, the fact that you keep applying the "loss aversion" hypothesis as broadly as possible, to things like wars and arguments, suggests you're assuming it applies everywhere. What about the stock example, which is mentioned in the article? That ought to prove you wrong, no?