Latest / Behavioral Economics with Fexingo: Decision Making, Bias, and How People Really Spend
How Loss Aversion Shapes Your Financial Choices
Why do we cling to losing investments or keep subscriptions we never use? In this episode, Lucas and Luna explore loss aversion, the behavioral economics principle that makes the pain of losing twice as powerful as the pleasure of gaining. We examine how this bias drives bad financial decisions, from holding onto declining stocks to paying for unused gym memberships. Using real-world examples like the disposition effect in trading and the 'boomerang effect' in retail returns, we break down why our brains are wired to protect what we have rather than pursue what we could gain…
The skinny
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