Loss Aversion
Loss aversion is the principle that losing something hurts more than gaining the same thing feels good — so we fight harder to avoid losses than to win equivalent gains.
Full definition of Loss Aversion →:: COMPARE ::
Loss aversionvsRisk aversion
The short answer
Risk aversion is a dislike of uncertainty, full stop. Loss aversion is anchored to a reference point — and it can push you toward *more* risk when framing turns a choice into a loss. Someone can be risk-averse over gains and risk-seeking over losses in the same afternoon.
Side by side
| Aspect | Loss aversion | Risk aversion |
|---|---|---|
| Anchored to | A reference point | Nothing |
| In the loss domain | Risk-seeking | Still cautious |
| Depends on framing | Heavily | Little |
| Consistent | No | Yes |
What each one means
Risk aversion
The contrast above sets out how Risk aversion differs from Loss Aversion on the points that actually matter.