Year: 2024
Type: article
Abstract: In the field of behavioral economics, loss aversion stands as a pivotal concept that significantly influences customers’ behavior and decision-making. This study aims to explore the applications of loss aversion in business, finding how loss aversion is used to attract and retain customers in advertisements and business strategies. Through a synthesis of experimental data and theoretical insights, the paper elucidates how businessmen can strategically utilize this bias to enhance customers’ engagement and retention, and uses a series of applications in business to show the power of loss aversion. This study's exploration of loss aversion within the business sphere underscores its profound impact on consumer psychology and decision-making processes. By dissecting the mechanisms through which loss aversion operates, we unlock opportunities for businesses to refine their strategies, enhancing customer engagement and loyalty. The strategic application of loss aversion principles not only promises to boost immediate sales but also to cultivate enduring consumer relationships—a critical asset in the dynamic business landscape.
Author: Luojie Zheng
Institution: Communication University of China
Language: English
Subfield: General Decision Sciences
Field: Decision Sciences
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W4405590988