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Why Are We So Afraid To Take Risks?
Whenever we hear the phrase “to take a risk”, what is our impression of it?
Most likely we will have a negative, distasteful experience that we can feel physically in our body.
To many of us, the word “risk” means:
- Danger
- Harmful
- Bad
- Reckless
- Ignorant
And many more.
In general, we as humans see risks as negative.
Why is that? — Enter Prospect Theory
Based on the 1979 paper by Nobel Prize winners Daniel Kahneman and Amos Tversky, the prospect theory has been a highly influential and can be credited as the reason the concept “loss aversion” is popularised in mainstream media.
Loss aversion is a concept where we value a small but guaranteed outcome versus a larger but risky outcome.
In the new study led by Kai Ruggeri (phD and assistant professor of health policy and management) in 2020, he has confirmed the 1979 study but in a much larger scale and robust way as it was conducted in so many…
