Professor Richard Thaler: Masters in Business (Audio)
Masters in Business
00:00
The Loss Oversion Thesis
When you lose money, in that mental accounting that we do, that loss of the average salary in the united states is about 50 thousand dollars. You lose a thousand dollars, that means that a week of your life is on and you've nothing to show for it. That's a significant loss. It's a permanent loss versus the benefit the temporary. I mean, that's the only way i've been able to rationalize why we despise the losses so much more than we enjoy the gains. We're just hard wired th and maybe in another 50 years whowill get over it, but not any time soon.
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