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Impact of Loss Aversion on Marketing

In: Proceedings of the 2022 2nd International Conference on Economic Development and Business Culture (ICEDBC 2022)

Author

Listed:
  • Zhenghong Gu

    (Hanghong No.4 High School International School)

  • Yujia Zhang

    (Shenzhen College of International Education)

  • Zimo Zhang

    (Shenzhen College of International Education)

Abstract

Scholars had long found that people were more concerned with losing than gaining. This theory was not confirmed experimentally by Tversky and Kahneman until 1979. Loss aversion was the truth that losses had a greater influence than gains. It was a basic property of behavioral account of choices. This review paper reviewed that loss aversion was affected by age, level of education and evaluation frequency. Marketers such as merchants took advantage of this fact to earn more profit, but not all policies benefited consumers. Consumers could mitigate the impact of loss aversion by exercising more to alleviate the degeneration of the brain and make more rational decisions. In most instances, risk aversion was closely linked and caused by loss aversion. But plenty of other studies showed that loss aversion didn’t stand alone, and that people made wrong decisions because of other factors too. Therefore, this motivated more people from other fields to contribute to the research of loss aversion.

Suggested Citation

  • Zhenghong Gu & Yujia Zhang & Zimo Zhang, 2022. "Impact of Loss Aversion on Marketing," Advances in Economics, Business and Management Research, in: Yushi Jiang & Yuriy Shvets & Hrushikesh Mallick (ed.), Proceedings of the 2022 2nd International Conference on Economic Development and Business Culture (ICEDBC 2022), pages 428-435, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-036-7_63
    DOI: 10.2991/978-94-6463-036-7_63
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