Impact of Loss Aversion on Marketing

Zhenghong Gu, Yujia Zhang and Zimo Zhang ()
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Zhenghong Gu: Hanghong No.4 High School International School
Yujia Zhang: Shenzhen College of International Education
Zimo Zhang: Shenzhen College of International Education

A chapter in Proceedings of the 2022 2nd International Conference on Economic Development and Business Culture (ICEDBC 2022), 2022, pp 428-435 from Springer

Abstract: Abstract Scholars had long found that people were more concerned with losing than gaining. This theory was not confirmed experimentally by Tversky and Kahneman until 1979. Loss aversion was the truth that losses had a greater influence than gains. It was a basic property of behavioral account of choices. This review paper reviewed that loss aversion was affected by age, level of education and evaluation frequency. Marketers such as merchants took advantage of this fact to earn more profit, but not all policies benefited consumers. Consumers could mitigate the impact of loss aversion by exercising more to alleviate the degeneration of the brain and make more rational decisions. In most instances, risk aversion was closely linked and caused by loss aversion. But plenty of other studies showed that loss aversion didn’t stand alone, and that people made wrong decisions because of other factors too. Therefore, this motivated more people from other fields to contribute to the research of loss aversion.

Keywords: loss aversion; behavioral economics (search for similar items in EconPapers)
Date: 2022
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DOI: 10.2991/978-94-6463-036-7_63

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