Episode 014: Analytics and Adaptation with Daryl Morey
The Decision Education Podcast
The Role of Asymmetric Loss Aversion in Decision Making
Loss aversion is that we don't like to make choices that carry some great chance of loss, right? So you're talking about a three point shot. You're going to miss it like 65% of the time. But then there's also asymmetric loss aversion, which is when we choose a status quo choice, loss aversion isn't triggered as much. The other factor that came into play is there are, for the first three quarters of a basketball game, expected value optimization is the right approach.
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