Psychology & Behavior
ProLoss Aversion Check
損失規避檢查 · Source: Daniel Kahneman / Amos Tversky
Distinguishing between genuine risk assessment and your brain's irrational fear of loss
Core Concept
The pain of loss is roughly twice as powerful as the pleasure of an equivalent gain. This means you'll instinctively reject positive-expected-value opportunities to avoid loss, and take unwarranted risks to recover from losses. Loss aversion is one of the most common enemies of rational decision-making.
✓ When to use this
When you are refusing a clearly better option because of "not wanting to lose what I have." E.g. staying in a job for stability, refusing to cut losses to avoid admitting defeat — loss aversion usually disguises itself as prudence.
✗ When not to use this
When the thing at stake is genuinely important and hard to rebuild (health, key relationships, rare opportunities), "not wanting to lose" is a valid signal, not a bias. Use Margin of Safety here instead.
Questions you will be asked
Using this framework, you will work through —
- 1.What is your decision? Which option are you leaning toward rejecting or avoiding?
- 2.What exactly are you afraid of losing? List them.
- 3.What is the actual probability of these losses occurring? What's the magnitude in the worst case?
- …and 3 more
Related Frameworks
Psychology & Behavior
Cognitive Bias Checklist
Pre-flight check before any important decision — scan for five high-frequency biases before you commit
Psychology & Behavior
Sunk Cost Check
Detecting whether you're continuing something you shouldn't — because of what you've already invested
Investment & Finance
Expected Value Analysis
Decisions with quantifiable outcomes — investments, business decisions, choices with probability and payoff structures