PGDM 1ST YEAR(2018-2020)

GROUP-A2
TOPIC- LOSS AVERSION
SUBMITTED TO: MR KARAN SABHARWAL
 LOSS AVERSION

Loss Aversion is an expression of fear. It explains why we

tend to focus on the positive events than the negative ones.
It means- losses hurt about twice as much as gain make you
feel good.
 IMPROVING STUDENT
PERFORMANCE THROUGH LOSS
AVERSION
 Perception of an individual through assets
 Structural flow work of behavioural insight team
 Inconsistent behaviour of students
 How student show Loss Aversion
 BOUNDARIES OF LOSS AVERSION
 Contrast made to the standard assumption of Utility
 Psychological principles related to Loss Aversion-
(a) Endowment Effect
(b) Exchange Paradigm
(c) Risky and Riskless Loss Aversion

 Three Propositions (P1,P2 ,P3) of Loss Aversion and its Boundaries

 EXPLORING THE NATURE OF LOSS
AVERSION
 Loss Aversion
- avoiding losses over acquiring gains
- losses are twice powerful as gains

 Query theory
- judgement of value
- two queries

 Types of variables
- knowledge
- age

 Applications
- older or less educated- more loss averse
 LOSS AVERSION UNDER
PROSPECT THEORY

Endowment effect –Meaning

Do adults behave better than childeren
Experiment conducted to show the
relationship between endowment effect and
age experience
Conclusion derived from the experiment
 DO PROFESSIONALS TRADERS
EXHIBIT MYOPIC LOSS AVERSION
 Loss Aversion is a positive and concave “value function”
over gains and is negative along with convex over losses.
Haigh & list’s theory and experiments:
- experiment between undergraduate and professionals
- individuals decision making example
 Results:
- behaviour of Professional traders proves the exhibition of
myopic loss aversion quality in them,
-this report is experimented and suggests the positive
implications to the likelihood
THANK YOU