U3L3 Loss Aversion (Behavioral Econ)

Loss aversion is the idea that..

• We tend to make investments that lose money

• We tend to avoid telling people about our losses

• If you lose money, you shouldn’t be in charge of making financial decisions

• We tend to feel the effect of losses more than the effect of similar gains

Which of the following loss aversion strategies best describes a streaming service that allows you to watch its content free for 30 days?

• Coupons

• Scarcity and urgency

• Buy now, get free shipping

• Free trials and samples

One way to overcome loss aversion is to…

• Avoid making a decision at all

• Reframe the situation so that you focus on the potential gains

• Ask a friend what they’d do and follow their example

• Think of the best case scenario and base your decision on how you feel

• Free Trials & Samples

• Coupons

• Scarcity & Urgency

• Buy Now, Get It Tomorrow

• Buy Now, Get X% Off

• Free Trials & Samples

• Coupons

• Scarcity & Urgency

• Buy Now, Get It Tomorrow

• Buy Now, Get X% Off

• Free Trials & Samples

• Coupons

• Scarcity & Urgency

• Buy Now, Get It Tomorrow

• Buy Now, Get X% Off

• Free Trials & Samples

• Coupons

• Scarcity & Urgency

• Buy Now, Get It Tomorrow

• Buy Now, Get X% Off

• Free Trials & Samples

• Coupons

• Scarcity & Urgency

• Buy Now, Get It Tomorrow

• Buy Now, Get X% Off

• Free Trials & Samples

• Coupons

• Scarcity & Urgency

• Buy Now, Get It Tomorrow

• Buy Now, Get X% Off

• Free Trials & Samples

• Coupons

• Scarcity & Urgency

• Buy Now, Get It Tomorrow

• Buy Now, Get X% Off