loss aversion

• reasons for loss aversion
  
  1-) attachment to objects/decision: if we own something, we can develop an attachment/relationship. if a family member gave us a statue worth £100, we might feel bad about selling – even if someone offered us £200. however, if we saw the exact same statue in the shop, we may not want to pay even £10.
  
  2-) it feels careless/bad luck: we don’t like losing because it feels like bad luck, carelessness.
  
  3-) image/reputational costs: if we lose, it may appear we are weak and it has a reputational cost. for example, if we invest in a project, but then give up because marginal cost is greater than marginal benefit – we may not be given another project. therefore, it may be in our rational interest to persevere and put a gloss on the new project, rather than admit we were wrong
  
  loss aversion