Loss Aversion: Origin, Components and Marketing Implications

Abstract

Loss aversion accounts for negative changes having a higher psychological impact than positive changes. Our paper reviews existing marketing literature on loss aversion and suggests directions for future research. We distinguish four dimensions of loss aversion — neural, cognitive, affective and conative — and identify socio-demographic characteristics, product characteristics and exchange conditions as three main groups of loss aversion moderators. We formulate strategic recommendations for marketers based on consumer loss aversion.