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Molson_Hart's profile
Molson Hart
Molson Hart
Molson Hart
@Molson_Hart

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Molson Hart

@Molson_Hart

CEO at http://amazon.com/viahart . CEO at http://edisonlf.com . I tweet about business, e-commerce, supply chain, health, law, & infrastructure

Austin, TX
Joined July 2015

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    1. Lyall Taylor‏ @LT3000Lyall 9 Nov 2019
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      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).

      2 replies 4 retweets 28 likes
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    2. Lyall Taylor‏ @LT3000Lyall 9 Nov 2019
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      Firstly, geometric math shows that a loss of 20% requires a 25% gain to recover; a loss of 30% a 43% gain to recover; and a loss of 50% requires a 100% gain to recoup, etc. This means that losing $50 is in fact worse than making $50. It should make you feel worse than the gain.

      4 replies 2 retweets 14 likes
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    3. Molson Hart‏ @Molson_Hart 9 Nov 2019
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      Replying to @LT3000Lyall

      If you go bankrupt, it seriously endangers the ability to ever make future gains. There are tons of reasons why loss aversion is rational. Above all, it exists. Economists with their heads up their own asses.

      1 reply 0 retweets 0 likes
    4. Lyall Taylor‏ @LT3000Lyall 9 Nov 2019
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      Replying to @Molson_Hart

      Exactly - see my second post I added on the declining marginal utility of money.

      1 reply 0 retweets 1 like
      Molson Hart‏ @Molson_Hart 9 Nov 2019
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      Replying to @LT3000Lyall

      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.

      6:11 PM - 9 Nov 2019
      1 reply 0 retweets 0 likes
        1. Lyall Taylor‏ @LT3000Lyall 9 Nov 2019
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          Replying to @Molson_Hart

          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.

          0 replies 0 retweets 1 like
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