Loss aversion is a big bias. It can impact us in so many ways – causing us to make strange decisions about money. This bias can actually cause you to become risk seeking when you’re faced with a possible loss and then risk averse when you have a gain on your hands. Yes, that’s quite complex behaviour… so we break it down for you carefully.
Our guest for episode 2 is Dr Greg Davies. He heads up the behavioural finance division of Oxford Risk in the UK and knows a lot about loss aversion. We also chat to him about risk tolerance (our topic from episode 1) because it would be wrong not to!
Useful links:
More about Greg Davies:
American Economic Association study on the PGA Tour - https://www.aeaweb.org/articles?id=10.1257/aer.101.1.129
Journal of Personality and Social Psychology medical information study - https://psycnet.apa.org/record/1987-22913-001
You can also read more on my blog: https://www.nudgingfinancialbehaviour.com/loss-aversion/
Or watch the video version of this podcast episode: https://youtu.be/9GR4OMTbzIo
Special thanks to everyone who has helped put this series together:
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