Introduction

3min Snip

00:00

Play full episode

Summary

Transcript

Episode notes

Loss aversion is the cognitive bias where our human brains care more intensely about losses than we do about equivalent gains. I was exposed to this at a young age in my mid-20s when I was managing money and doing trades for billionaires on Wall Street. Many years later, I discovered this is an example of the psychological cognitive bias called loss aversion. If we start with, say, $10,000 and we get an immediate windfall gain of 1,000 or 10%. We measure the psychic utility of that.

On this Frankly, Nate reflects on his experiences in the financial industry with the cognitive bias Loss Aversion and the ways it may manifest to the coming material throughput declines during The Great Simplification. Why do losses feel so much stronger to us than gains - even when we have an overabundance of wealth? Can being aware of this evolved psychological trait diffuse its intensity? How does this affect our ability to perceive and plan for the reality of less available energy and resources in the future?

To Watch on Youtube: https://youtu.be/cKqu3gH1Mz4

For Show Notes and More: https://www.thegreatsimplification.com/frankly-original/25-loss-aversion