Chapter21: Demand: Consumer Choic
Section: Chapter Questions
Problem 15E
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Question
Explain how loss aversion impacts our decisions as consumers?
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Loss aversion is one of the major concepts in prospect theory in behavioral economics that helps in making important decisions and prevents consumers from incurring huge losses. There is a huge number of decisions that the consumers will have to make on the wide range of choices available. Though there are strategies available to make easy decisions, the higher the risks, the higher will be the role of loss aversion in making decisions.
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