Foundations of Law and Economics
Intermediate
Loss Aversion
The tendency for losses to matter more to decision makers than equivalent gains, measured relative to a reference point.
Why It Matters
Loss aversion can affect bargaining, settlement, default-rule stickiness, investor trading, compensation demands, and resistance to legal or regulatory change.
Selected Literature
A short list of directly relevant archive entries.
1979
Advanced
1991
Advanced
Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias
Daniel Kahneman, Jack L. Knetsch, and Richard H. Thaler
Journal of Economic Perspectives
1996
Advanced
2012
Advanced
Seduction by Contract: Law, Economics, and Psychology in Consumer Markets
Oren Bar-Gill
Oxford University Press
Related Cases
1707
Foundations of Law and Economics
Keeble v. Hickeringill
11 East 574, 103 Eng. Rep. 1127 (K.B. 1707)
Property protection, malicious interference, and incentives to make productive use of land.
1805
Foundations of Law and Economics
Pierson v. Post
3 Cai. R. 175 (N.Y. Sup. Ct. 1805)
First possession, capture rules, and the administrability of property rights in wild animals.
1854
Foundations of Law and Economics
Hadley v. Baxendale
9 Exch. 341, 156 Eng. Rep. 145 (1854)
Foreseeability, information disclosure, and limits on consequential damages for breach of contract.
1879
Foundations of Law and Economics
Sturges v. Bridgman
11 Ch. D. 852 (1879)
Nuisance, coming to the nuisance, and reciprocal conflicts over incompatible land uses.