Deprival-Superreaction in a way is loss aversion. Loss aversion refers to people’s tendency to strongly prefer avoiding losses to acquiring gains. Most studies suggest that losses are twice as powerful, psychologically, as gains.
A man ordinarily reacts with irrational intensity to even a small loss, or threatened loss, of property, love, friendship, dominated territory, opportunity, status or any other valued thing
2 thoughts on “Bias 14 – Deprival-Superreaction Tendency”
This bias is probably one of my favorites,
Basically lets say you get payed $50k a year and you get a raise of $50k. You’re now making $100k a year and you feel GREAT!
Now lets take a different approach.
You make $100k a year and because of issues with your company, you now only get $75k a year and you feel F****** PISSED!!!
Many studies suggest that losses are twice as powerful, psychologically, as gains.
A little better way of saying is this. You invest $40,000 and by the end of the year it’s worth $60,000. You feel great but it doesn’t impact your feeling or behaviors significantly. Now say that you have an investment that started out with an evaluation of $60,000 but it’s only worth $50,000 by the end of the year. You could become irrational, depressed, reactive , bitter and overwhelmed by this. This smaller loss will have a much greater impact than the larger gain.