Relation Between Loss Aversion and Human Behavior

Mengyadi Liang

2025

Abstract

A cognitive bias known as loss aversion occurs when people would rather avoid losses than experience comparable gains; in other words, the psychological pain of losing is greater than the psychological pleasure of winning. This fundamental idea of prospect theory aids in the explanation of risk-averse decision-making behaviour. In general, loss aversion is a psychological phenomenon that refers to people's aversion to losses greater than their preference for gains of equal value. This paper reviews the conceptual history of loss aversion and discusses the existence of loss aversion and its significant impact on human investment behavior. Through experiments and case studies, it is revealed that individuals show different levels of disgust in different decision-making environments. The study also investigated the effects of self-protection mechanisms, gender, and age on loss aversion. Through the experiment of three experiments and measurement scale, it is proved that they do have a correlation effect on people's attitude of loss aversion. At last, it deals with the future research direction of the concept of loss aversion, hoping to provide better investment decision support for investors and not fall into the emotional trap of loss aversion.

Paper Citation

in Harvard Style

Liang M. (2025). Relation Between Loss Aversion and Human Behavior. In Proceedings of the 2nd International Conference on Applied Psychology and Marketing Management - Volume 1: APMM; ISBN 978-989-758-791-7, SciTePress, pages 697-702. DOI: 10.5220/0014151200004942

in Bibtex Style

@conference{apmm25,
author={Mengyadi Liang},
title={Relation Between Loss Aversion and Human Behavior},
booktitle={Proceedings of the 2nd International Conference on Applied Psychology and Marketing Management - Volume 1: APMM},
year={2025},
pages={697-702},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0014151200004942},
isbn={978-989-758-791-7},
}

in EndNote Style

TY - CONF

JO - Proceedings of the 2nd International Conference on Applied Psychology and Marketing Management - Volume 1: APMM
TI - Relation Between Loss Aversion and Human Behavior
SN - 978-989-758-791-7
AU - Liang M.
PY - 2025
SP - 697
EP - 702
DO - 10.5220/0014151200004942
PB - SciTePress