It is often argued that humans/investors' loss aversion psychological tendency, where losses are twice as painful as an equivalent monetary gain is psychologically rewarding, is irrational. It's not. This asymmetry is perfectly rational (thread continued below).
Yup, thought of that one as well. If you don't know why something is the way it is, you ought not to call it irrational or call for its removal. That's what economists are doing here. Time to rewrite the entire Kahnneman Tversky hagiography.
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Not sure I'd rewrite all of Kahneman/Tversky. But on this point, the implicit assumption that each dollar is of equal marginal utility to people is fundamentally wrong.
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