Myopic Loss Aversion

Are you be willing to accept the following offer:
“a 50 percent chance to win $200 and a 50 percent chance to lose $100”.

1. “losses loom larger than corresponding gains”
2. “losses and disadvantages have greater impact on preferences than gains and advantages”
3. “people feel losses more deeply than gains of the same value”
4. “if you look at your investments closely/frequently, you will miss the bigger picture”

Read more:
Investment-MyopicLossAversion0.pdf
Investment-MyopicLossAversion1.pdf
Investment-MyopicLossAversion.pdf
loss-aversion.behaviouralfinance
…

 

Related Posts:
http://blindcaveman.wordpress.com/tag/finance/