Why You Feel the Pain of Losing $20 More than the Pleasure of Winning $80
That’s how loss aversion works.
You have this old T-shirt in your closet. It’s been there for years now. The color is faded. The cloth is warned out.
Yet, you wouldn’t let that go. You could toss it out in the dustbin. But you don’t.
What has made you stick with it?
Ever wondered what stops people from investing in stocks?
In the book The Catalyst: How to Change Anyone’s Mind, the author Jonah Berger shares interesting research.
Tell me, who would recover faster?
Someone with a shattered knee or the one with a slight knee injury?
You’d say it’s obvious. The one with a slight injury.
But the study found something different. The person with severe injury was likely to recover more quickly than the one with mild injury.
Why?
Because someone with a serious injury is more likely to take it seriously — check with doctors, get the right treatment, stay cautious, and take care of themselves. If they don’t take enough care of it the injury would increase. They might lose their ability to walk properly.
