Simple test: if you could lose or double your money (say a month's earnings) on a fair coin toss, would you do it?
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That's just risk aversion or declining marginal utility
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Ask any gambler if their worst loss was worse or their best win was better in absolute terms. Loss aversion is most definitely a thing.
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Loss aversion may not be right, but it's what we have and it would be terrible to lose it, so I'm sticking with it.
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[Comment indicating I haven't even read the excerpt in the above tweet].
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Loss isn't the exactly opposite of gain. Loss includes history/memory of having the thing. Gain only includes anticipated joy etc
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Portfolio manager inner dialogue: "When I generate returns for my clients, I'm just 'doing my job.' When I lose $, 'I'm failing at my job.'"
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Do academics really think this way? Of course loss aversion isn't universal. The aversion to loss is obviously directly linked to its effect
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