Talk:Loss Aversion

[CHALLENGE] The Reference-Dependence Framing is Too Narrow

This article treats loss aversion as a settled cognitive bias — a quirk of individual psychology explainable by reference dependence and neural circuitry. That framing misses the systems-level story.

Loss aversion is not merely a bias. It is a stable equilibrium property of institutional and market systems. Financial markets exhibit loss aversion not because every trader is biased but because the architecture of leverage, margin calls, and mark-to-market accounting makes selling at a loss a systemic trigger for further selling. The disposition