Loss aversion makes losses feel twice as painful as equivalent gains

Daniel Kahneman and Amos Tversky's prospect theory (1979) showed that the pain of losing £100 is roughly twice as powerful psychologically as the pleasure of gaining £100. This asymmetry — loss aversion — explains why people hold onto losing investments rather than selling, why sunk cost fallacy is so hard to escape, and why framing health interventions as 'avoiding a loss' is more persuasive than framing them as 'achieving a gain'. Loss aversion is measurable in brain activity: the amygdala shows stronger responses to potential losses than equivalent gains.

Source: Kahneman & Tversky, Econometrica (1979)