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Loss Aversion: Why Losses Hurt About Twice as Much as Equivalent Gains Feel Good

Behavioral Finance • Beginner Investing • 7 min

If you found $100 on the sidewalk, you'd feel good. If you lost $100 from your wallet, you'd probably feel considerably worse than "good" felt — and that asymmetry isn't just a personality quirk, it's one of the most robustly replicated findings in behavioral economics. Psychologists Daniel Kahneman and Amos Tversky's research on "prospect theory" found that losses are felt roughly twice as intensely as…

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