13 January, 2014

2-1-14 the human mind: Loss aversion

The 2nd type of motivation (moving away from something) is originated primarily from a basic behavior, we call it: loss aversion
-          People HATE to lose more than they love to gain/acquire
Studies show that:
-          The magnitude of the feeling of losing or threat of losing a certain thing is twice as strong as the feeling of gaining/acquiring it
-          We are more likely to notice threats and respond faster to it than opportunities
The basic clearest explanation of this is the bond we create over time with the stuff we own, whether they are tangible, intangible, soulless or living. We even hate to replace an old, torn toy with an identical one; they don't just feel the same

 That's why (Risk Removal) is very important kind of service (refund, payback, guarantees) \ stand-alone business (insurance), because it satisfies a basic human need