Why We Fear Losing More Than We Love Winning

Today, while reading Daniel Kahneman’s Thinking, Fast and Slow, I came across a concept that truly stood out — loss aversion.

Loss aversion refers to the relative strength of two motives: we are driven more strongly to avoid losses than to achieve gains. The pain of losing something is psychologically about twice as powerful as the pleasure of gaining something of equal value. In simple words, we hate losing more than we love winning.

What makes this idea fascinating is how deeply it influences our everyday decisions, often without us realizing it.

Kahneman describes an interesting example of New York cab drivers. On rainy days, when passengers are everywhere and business is booming, many drivers go home early because they’ve reached their daily income target. On pleasant, sunny days, when it’s harder to find customers, they drive for much longer hours. From a purely economic perspective, this is irrational. Rainy days are more profitable; logic says they should work longer then and rest when business is slow. But psychologically, they are not maximizing income they are avoiding the feeling of “falling short.” The fear of not reaching a daily target outweighs the joy of exceeding it.

Another example that perfectly captures this pattern comes from professional golf. Economists Devin Pope and Maurice Schweitzer analyzed more than 2.5 million putts to test a simple idea derived from loss aversion. For every hole, golfers have a “par” - a reference point. Making a bogey (one stroke over par) feels like a loss, while making a birdie (one stroke under par) feels like a gain. The researchers found that players putt more successfully when trying to avoid a bogey than when trying to score a birdie. The difference in success rate was about 3.6%. Even Tiger Woods, in his best years, would have earned nearly a million dollars more per season if he had putted as well for birdies as he did for pars.

No golfer consciously decides to try harder to avoid a bogey than to achieve a birdie. Yet, the data revealed an unconscious truth the aversion to loss sharpens focus and effort. Losing feels worse than winning feels good.

Once you start looking for it, this pattern is everywhere. In negotiations, in business, and in daily life, loss aversion shapes behavior. When an agreement is renegotiated, the existing terms become a reference point. Any proposed change is viewed as a concession - a loss. The pain of giving up something outweighs the pleasure the other side feels in gaining it, making agreements harder to reach.

Even in personal goals, we see the same bias. Not achieving a goal feels like a loss; exceeding it feels like a gain. But our aversion to failure is far stronger than our desire to succeed. People often adopt short-term goals not to exceed them, but simply to avoid falling short. Once the target is reached, motivation drops. The mind quietly says, “I’m safe now,” and effort decreases.

Loss aversion explains why we hold on to what we have jobs, relationships, investments, even habits sometimes far longer than we should. We defend the status quo not because it’s always best, but because the potential loss of change feels worse than the uncertain gain it might bring.

It’s humbling to realize that our sense of rationality is constantly bent by such psychological forces. We think we make decisions logically, yet our emotions quietly tilt the scale.

Haha good one! thanks for reading