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

Cornell Law Faculty Publications

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 …