Loss Aversion Is an Affective Forecasting Error

@article{Kermer2006LossAI,
  title={Loss Aversion Is an Affective Forecasting Error},
  author={Deborah Ann Kermer and Erin Driver-Linn and Timothy D. Wilson and Daniel T. Gilbert},
  journal={Psychological Science},
  year={2006},
  volume={17},
  pages={649 - 653}
}
Loss aversion occurs because people expect losses to have greater hedonic impact than gains of equal magnitude. In two studies, people predicted that losses in a gambling task would have greater hedonic impact than would gains of equal magnitude, but when people actually gambled, losses did not have as much of an emotional impact as they predicted. People overestimated the hedonic impact of losses because they underestimated their tendency to rationalize losses and overestimated their tendency… 

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