Suppose Vincent is willing to pay $350 to buy a new bike. Loss aversion implies that if Vincent had just bought the bike, you would:

Question

Quizplus · Accepted Answer

Loss aversion is the tendency to experience losses as more painful than the pleasures that result from gains of the same magnitude. In this case, losing the bike would be more painful than the pleasure associated with getting the bike, so you would have to pay Vincent more than $350 to part with it.

Suppose Vincent Is Willing to Pay $350 to Buy a New