Loss aversion on betting

Why You Should Bet Against Your Candidate

When your favorite sports team is defeated, you’re disappointed, even dismayed. The same is true when your preferred political candidate doesn’t win. It hurts when your side loses. Fortunately, you can insure yourself against such unhappiness: just place a bet for your side to lose. This strategy, which has become easy to do with the rise of online prediction markets, creates a consolation prize — say, $1,000 (or whatever it takes) — to reduce your pain in the event of a defeat. Logic strongly recommends this kind of emotional hedge. Consider that for most people, losing something hurts more than gaining that same thing feels good — a phenomenon known as loss aversion. ….[READ]

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