Loss-Aversion Bias

Displaying risk-seeking behavior when faced with losses , while generally being risk averse, is known as loss-aversion.

Could someone give an example or two of the bolded part in action?


You’ll risk holding on to those positions rather than booking a loss on them.

oh okay, i just thought it was worded weird. so basically its just saying that if presented with a frame that you’re losing, you’ll continue to put off losses and therefore become risk seeking

no. you hold on to your losers under loss aversion bias. you’ll sell your winners quickly though, thinking they’ll turn to losers.

right yeah, by put off i meant hold. gotcha