A Two-Word Psychological Concept Can Explain The Anger Over Obamacare’s Potential Repeal As you may have noticed, the prospect of Congress repealing the Affordable Care Act, as Republicans have long promised to do, has sparked a pretty furious political backlash. … Continue reading Obamacare and loss aversion
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 … Continue reading Loss aversion on betting
Clinton’s reframing of Trump as risky is risky itself Just a couple of quick observations about how Trump is currently being framed in the 2016 US Presidential election. First, how Team Trump is framing The Donald. Then a look at … Continue reading Framing in politics
Loss Aversion and Romance Loss aversion is one of the most important concepts in behavioral economics. It refers to the fact that we care more about losses than about gains when we make decisions. “Losses loom greater than gains” is … Continue reading Are you a deal breaker in love?
You’re only human: An economist explains how it hurts your portfolio I recently had the privilege of sitting down for a chat with Richard Thaler, professor of the Booth School of Business at the University of Chicago. Thaler is widely … Continue reading Does your brain know what’s best for you?
10 Myths About Risk Tolerance and How to Accurately Measure It Risk tolerance is an individual’s general willingness to take risk in managing their financial affairs. Risk tolerance reflects the balance between having too much risk and too little. An … Continue reading Can financial advisors measure our risk tolerance?
A better explanation of the endowment effect It’s a famous study. Give a mug to a random subset of a group of people. Then ask those who got the mug (the sellers) to tell you the lowest price they’d sell … Continue reading Loss aversion vs. endowment effect