What's the bias???
Loss Aversion is...
What is the fear of losing is twice as severe as gaining the satisfaction of gaining the equivalent of what you lose? (Wording may vary)
Provide a non-fiance example of Loss Aversion
What is maintaining a previous relationship, fear of failure, fear of losing currently salary, etc? (Results may vary)
True or False:
Loss Aversion affects a person's ability to make logical choices
What is TRUE?
Lenny just ordered a mushroom and olive pizza because he felt that it was about time that he eats. He ordered a large thinking he would eat most it. However, he didn't take into consideration that he wasn't really that hungry so he didn't finish it. He felt obligated to finish because of the pizza's price.
What is No?
This is an example of Sunk Cost Fallacy
Ask yourself, “What would be the _____ possible income if I were to take that risk?”
What is worst?
Loss Aversion is an example of this
What is Cognitive Bias?
Provide a fiance example of Loss Aversion
What is less likely to invest in stocks, refuse to sell, less likely to accept a bet or gamble, etc? (Results may vary)
True or False:
Loss Aversion doesn't lead to irrational decisions or behavior
What is FALSE?
Fear of preventing incurring losses can lead to the refusal of taking well-thought risks with potential benefits or penalties.
Arthur was engaged in a conversation about the new Ghost Rider Adias with his friend Billy. Billy was so excited to tell his friend that he actually just purchased a pair last week and that he should be receiving them today in the mail. Arthur was happy for his friend! However, he felt a bit excluded and upset because he also wanted a pair since his friend had a pair and since they were apart of hype going around.
What is No?
This is an example of FOMO
The fear of losing is _____ as severe as gaining the satisfaction of gaining the equivalent of what you lose.
What is twice?
Things you might be afraid to do in terms of Loss Aversion
What is betting/gambling, investing in stocks, walk away from a bad situation, cover up a mistake? (Answers may vary)
Ways to overcome Loss Aversion
What is bringing the losses into perspective or framing options?
Jefferson is given the choice between receiving $25 for sure or he can flip a coin to either win or lose $50. He takes the guaranteed $25 because he doesn't want to take the risk of potentially losing $50 when he is guaranteed to get $25
What is Yes?
This is an example of Loss Aversion
Bring the losses into ______ and recognize the strong emotional impact associated alongside those losses.
What is perspective?
Decisions this bias may affect
What is financial, social, career, etc? (Answers may vary)
Sarah bought a scratch ticket for $10. She is hoping that she will win at least $10 and be lucky...maybe even more! Hope is lost after she realizes that she didn't win anything. So she made the decision that from now on, she won't be purchasing any more scratch tickets because she is worried about taking the risk of losing money. Additionally, she is also worried about receiving incurring losses from scratch tickets.
What is Yes?
This is an example of Loss aversion
Fear of preventing incurring losses can lead to the ____ of taking well-thought risks with potential benefits or penalties.
What is refusal?
All of Maria's friends at school said that Project Hail Mary was an amazing movie and that it was definitely worth the wait and that the acting was excellent. Maria assumes that she will enjoy it without her ever even watching it.
What is No?
This is an example of the Bandwagon Effect
______ options so that it clearly shows the benefits that can be achieved, rather than exemplifying the lose/risks involved
What is frame?