Loss aversion

You'll be able to define loss aversion precisely — the empirical finding that losses loom roughly twice as large as equivalent gains — and explain why it is distinct from risk aversion or mere unhappiness.

You'll be able to describe how Kahneman & Tversky's prospect theory formalizes loss aversion through an S-shaped value function that is steeper for losses than gains, anchored to a shifting reference point.

You'll be able to identify surprising, research-backed manifestations of loss aversion — from the endowment effect and sunk-cost fallacy to investor disposition effects and policy design failures.

You'll be able to articulate the key empirical challenges and boundary conditions — including Gal & Rucker's 'loss aversion is a myth' provocation — that complicate the canonical account and point toward open research questions.