Sentences with phrase «'s loss aversion»

Companies seem to be increasingly offering insurance on all manner of things in part because of something known as loss aversion, which is when people feel a more psychological impact from a loss than from a similar - sized dollar gain.

Companies seem to be increasingly offering insurance on all manner of things in part because of something known as loss aversion, which is when people feel more psychological impact from a loss than from a similar - sized dollar gain.

This plays a big role in investor behavior: Investors have a (bad) habit of selling winners and not letting losers go because of loss aversion rather than for logical financial reasons.

The study, titled «Prospect Theory: An Analysis of Decision under Risk,» found that loss aversion «expresses the intuition that a loss of $ X is more aversive than a gain of $ X is attractive... for example, most respondents in a sample of undergraduates refused to stake $ 10 on the toss of a coin if they stood to win less than $ 30.»

It's volatility in both the markets and investors» portfolios, paired with uncertainty — as we're experiencing again — that drive fear and loss aversion.

Retailers should not hesitate to use loss aversion as a motivator to create urgency.

That loss aversion — our tendency to feel more pain with losing than pleasure with winning — might prompt us to cut and run during a market down day.

Studies in behavioral finance, which look into the effects of investor psychology on stock prices, also reveal investors are subject to many biases such as confirmation, loss aversion and overconfidence biases.

Several lessons are devoted to communication, specifically ways to employ trust, loss aversion and Read more -LSB-...]

Even central bankers are not immune to the desire for loss aversion, as they grapple with multi-billion-dollar decisions that could unintentionally cripple their economies.

As we enter into the summer months, divergent policies among major central banks seem likely to have a pronounced impact on investors» loss aversion instincts.

Within the broader risk / reward topic is the theory of «loss aversion,» which states that investors prefer to avoid losses even more than they desire to reap rewards.

As this underscores, even central bankers are not immune to the desire for loss aversion, as they grapple with multi-billion-dollar decisions that could unintentionally cripple their economies.

Collectively, these factors helped the markets recover, and by mid-May, both crude oil and the S&P 500 Index were higher than where they began 2016, as loss aversion behavior had reverted to more historically average levels.

The best solution is often to ignore the noise, focus on the big picture, and on occasion, repress your loss aversion instincts.

As shown in the following chart, the price of West Texas Intermediate (WTI)-- a benchmark for crude oil — fell early in 2016, sparking a global loss aversion shift as investors began looking for a potentially higher - yielding investment opportunity.

In response, loss aversion tightened its grip on investor behavior, causing many business development companies, hedge funds, and private equity firms to redeploy their capital elsewhere in an effort to avoid further losses.

However, as is virtually inevitable with loss aversion behavior, sentiment eventually shifted.

Performance chasing should not be due to myopia, irrational loss aversion, or other psychological biases.

This is a classic case of short - term myopic loss aversion overwhelming long - term market gains.

«Do Professional Traders Exhibit Myopic Loss Aversion?

«Loss Aversion And Seller Behavior: Evidence from the Housing Market,» Quarterly Journal of Economics 116 (4), 1233 - 1260.

Loss Aversion As I've written in the past, humans are programmed, through millenniums of adaption, to suffer pain twice as much as we enjoy gain.

The combination of fear, social proof [other investors are selling], loss aversion [we feel losses twice as much as gains] and recency bias [we overweigh what has happened recently and underweigh or ignore the long term evidence] counteract the average investors attempt to make a rational decision.

But he would like Sanfey to explore in future studies how a different motivation, loss aversion, also plays into these findings.

Then there's loss aversion: it feels worse to lose something than to gain the equivalent amount, making us protect what we have rather than take a chance to make a gain.

One answer, I suggest, is in the psychology of loss aversion, in which, on average, losses hurt twice as much as gains feel good.

Loss aversion and the endowment effect are reinforced by the status quo bias, or the tendency to opt for whatever it is we are accustomed to.

The loss aversion that dogs our ability to deal with climate change as George Marshall describes (16 August, p 24)...

For instance, it's been recognized for several decades the people are more sensitive to losses than to gains, a phenomenon known as loss aversion.

In «Entrepreneurship and Loss - Aversion in a Winner - Take - All Society,» Professor John Morgan at UC Berkeley's Haas School of Business and co-author Dana Sisak, assistant professor at the Erasmus University Rotterdam, focused on the powerful impact of loss aversion.

High loss aversion seemed to help players» performance when they were threatened with increasing losses; even with a potential $ 100 loss, participants in this category didn't choke.

Chib believes that these results confirm that the ventral striatum is the interface between incentive - driven motivation and execution of physical performance, and he hopes these insights could help coaches and others to work with — or overcome — people's loss aversion in order to maximize their performance.

When compared to their performance on trials with no monetary value, those with high loss aversion who were offered gains of $ 25 to $ 75 also showed improved performance, but when offered a $ 100 award, they choked.

Morgan and Sisak found an entrepreneur's level of ongoing concern about loss aversion correlates with entrepreneurial effort.

Those with high loss aversion choked when told they stood to gain a lot, while those with low loss aversion choked under the pressure of large prospective losses.

Loss aversion, or the fear of losing one's salary at a full - time job, along with its prestige, is directly linked to the amount of effort an entrepreneur puts into a startup.

Loss aversion, the researchers found, is what drives most entrepreneurs, not a love of risk.

We think that the reason is a phenomenon called loss aversion.

But in 2016, two campaigns built on populist themes of fear, lost pride and loss aversion awoke previously uninfluential traits, particularly those of anxiety, anger and fear — all of which are aspects of the Big Five trait of neuroticism.

List said he believed that the loss aversion incentive was so successful because it made teachers focus on the kids who were not mastering the material and stick with them until they got it.

The behavioral economics concept of myopic loss aversion suggests that accelerating loan subsidies to the time of enrollment would increase their effectiveness as an incentive to enroll.

Prior studies involving loss aversion have found that the technique is more effective when people feel the threat of periodic and regular losses.

Loss aversion has been shown to be a powerful motivator in many business settings, but List said this was the first rigorous test of the principle in an educational setting.

At the EEF, we recently trialled (through a grant to the University of Bristol) the impact of incentives and loss aversion on the attainment of 10,000 pupils in Year 11 sitting their GCSEs in 63 schools:

«What we found is strong evidence in favor of loss aversion,» he said.

The impact of loss aversion and overconfidence on corporate strategies, the difficulties of predicting what will make us happy in the future, the challenges of properly framing risks at work and at home, the profound effect of cognitive biases on everything from playing the stock market to planning the next vacation - each of these can be understood only by knowing how the two systems work together to shape our judgments and decisions.

I've taken some liberties and defined these three reasons using mindfulness terminology (worries and fears) instead of behavioral economics jargon (loss aversion and regret avoidance) used in the original Shefrin and Statman paper.

Alternatively, some researchers believe people's tendency to strongly prefer avoiding losses over achieving gains (known as loss aversion) can help explain this anomaly.

And gambling, that's a great point, in a negative sum game why doesn't loss aversion over power the thrill of the win?