Loss aversion, a fundamental concept in behavioural economics, refers to the tendency for individuals to prefer avoiding losses rather than acquiring equivalent gains. This principle suggests that the pain of losing is psychologically more impactful than the pleasure of gaining. In marketing and growth strategies, leveraging loss aversion can significantly influence consumer behaviour and drive results.
What Is Loss Aversion?
Loss aversion, sometimes referred to as threat or loss avoidance, is the idea that the fear of losing something can be a stronger motivator than the desire to gain something of equal value. This concept is a type of cognitive bias, where people’s decisions are influenced by their aversion to potential losses rather than the potential for gains.
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