MichaelAaron Flicker

And other studies have shown similar real world situations and outcomes.

So what we learned from that is it's human nature to want to hold on to things more than they want to gain new things.

And that psychological barrier of being afraid of losing something really has an outsized impact on our actions.

So, Shannon, you mentioned the got milk example.

The book goes through great brands and how they've taken advantage of psychological insights into how we act and how that's led to good business outcomes for them.

So Got Milk could have very easily said, think about how amazing Oreos would be and Chips Ahoy's would be with milk.

But they don't say that.

What they say is how...

bad would those Chips Ahoy's and Oreos be without a delicious glass of milk with it?

And that fear of not having it is a much stronger sensation.

And that's what drives people to act because of loss aversion.

I think there's probably two major psychological impacts that are driving investor decisions as a marketer.

One, I would say is loss aversion, without doubt, Rich.

The second is this concept called the sunk cost fallacy.

And it's really an interesting insight

So let's pair it with loss aversion.

So loss aversion says the pain of losing is more intense than the pleasure of an equivalent gain.

In fact, I need to have twice as much gain to be worth the risk of that loss.

So that's loss aversion.

Sunk cost fallacy is this idea