Law Commons^™

Gains, Losses, And Judges: Framing And The Judiciary, Jeffrey J. Rachlinski, Andrew J. Wistrich

Notre Dame Law Review

Losses hurt more than foregone gains—an asymmetry that psychologists call “loss aversion.” Losses cause more regret than foregone gains, and people struggle harder to avoid losses than to obtain equivalent gains. Loss aversion produces a variety of anomalous behaviors: people’s preferences depend upon the initial reference point (reference-dependent choice); people are overly focused on maintaining the status quo (status quo bias); people attach more value to goods they own than to identical goods that they do not (endowment effect); and people take excessive risks to avoid sure losses (risk seeking in the face of losses). These phenomena are so pervasive …