Do losses really hurt twice as much as gains?

Roughly, in many experiments, though the 'twice' is less universal than its fame suggests. Loss aversion is the finding that the same outcome feels worse when framed as a loss than as a gain. Daniel Kahneman and Amos Tversky named it in 1979, and on average people treat a loss as if it were about twice as large as an equal gain. But researchers now argue over how general it is, and some find it mainly for large stakes.

Money shows it vividly. In a classic experiment, Cornell students given a coffee mug demanded about $7 to sell it, while students without one would pay only about $3. Among investors, a study of 10,000 brokerage accounts by Terrance Odean found that for most of the year a stock that had risen was almost 60 percent more likely to be sold than one that had fallen: people cash in winners and cling to losers, as if selling a loser would make the loss real.

Even capuchin monkeys seem to feel it. Offered the same single piece of apple, they strongly preferred an experimenter who showed one piece and handed it over to one who showed two and took one away.

The debate is real, though. Some studies found no loss aversion in risky choices, and the psychologist David Gal argued that much of what's blamed on it is better explained by simple inertia. Others replicated it across five samples and showed its size varies predictably. The best summary today is that losses often loom larger than gains, but how much depends on the stakes and the setting.