What is loss aversion?

Loss aversion is the tendency to feel a situation far more strongly when it is perceived as a loss than as a gain; empirical studies have found that people feel losses about twice as strongly as gains of the same size.

The concept was presented by Daniel Kahneman and Amos Tversky in prospect theory. Because of this tendency, judgment may become clouded in an effort to avoid realizing losses, or people may make overly conservative choices.