Loss aversion is a psychological bias where the pain of losing something feels significantly more intense than the pleasure of gaining something of equal value, which explains why people often avoid taking risks even when potential gains are substantial, as demonstrated by the example of investors feeling regret about missed opportunities even when their investments perform well.
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Why your brain avoids risk: Understanding the psychology of loss aversion.Added:
Okay? And the reason many people don't take risk is because losses feel bad. Humans Have you heard of something called loss aversion?
It's a theory where a loss hurts you much higher than a win.
If you win, you're like Like I'll give you a good example. We invested uh 15 lakhs in a company recently.
Uh we invested this from Combinator.
And the company's done very well.
Probably up 2x, 3x.
And we're just like we're feeling bad about it. I'll tell you why. Because we had the opportunity to invest in this company a year prior.
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