Dr. Matthew Paldy

The Psychology of Thinking About Gains vs. Losses

People are generally more affected by fear of loss than by the prospect of making a gain. Some studies suggest that losses are TWICE as powerful, psychologically, as gains. Loss aversion means that losing $100 hurts more than winning $100 feels good. Framing an issue in terms of gain or loss can greatly influence an individual's choice. In marketing, the use of trial periods and rebates try to take advantage of the buyer's tendency to value the good more after he incorporates it in the status quo. The buyer will forget the pain of purchase price and focus on the product's benefits.

Loss aversion is evident on a national scale as well. Nations have gone to war and "stayed the course" until their doom because of loss aversion. It simply means you refuse to admit you made a mistake. "Once we have committed a lot of time or energy to a cause, it is nearly impossible to convince us that it is unworthy." -- Various sources

We can see that our relation to perceived gains vs. losses can play a role in our psychological functioning. Psychoanalytic psychotherapy can help to illuminate these modes of thinking and leads to more awareness and satisfaction.