Exploring the Impact and Decisions of Loss Aversion Psychology in the Real Estate Field and Energy Conservation
Year: 2024
Type: article
Abstract: The well-known phenomenon of loss aversion, which refers to the tendency for individuals to strongly prefer avoiding losses over acquiring gains, has long been recognized as a significant factor influencing decision-making in various aspects of life. This innate fear of experiencing losses can often lead to irrational behavior and unwise choices. One area where loss aversion plays a crucial role is in the realm of personal finance. Individuals who have a strong aversion to losses may exhibit cautious behavior by increasing their savings as a precautionary measure against uncertain future events. From real estate and various national policies to daily life choices, these choices can change people's aversion to losses. Therefore, the primary focus of this article is to explore the decision-making processes employed by real estate developers and customers under the influence of loss aversion mentality, as well as people's choices for energy conservation driven by loss aversion mentality. Through data analysis, this article concludes that if consumers reasonably control and utilize their loss aversion psychological effects, they will not suffer any economic losses.
Author: Junjie Lin
Institution: Auburn University
Language: English
Subfield: General Decision Sciences
Field: Decision Sciences
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W4405591287