 Loss Aversion. People are more sensitive to losses than gains of the same magnitude; the thrill of victory does not measure up to the agony of defeat. So, Kahneman and Tversky maintained, people will prefer an option that does not incur a loss to an alternative option that yields an equivalent gain. The disparity in how potential gains and losses are evaluated also accounts for the endowment effect, which is the tendency for people to value a good that they own more than a comparatively valued substitute (Thaler 1980).