In summary, what is often described as &quot;loss aversion&quot; is actually just an expected property of diminishing marginal utility, and does not require a new term to explain it.<p>Loss aversion, instead, is state dependence that makes you feel worse about state X if you came from state X+1, and better about it if you came from state X-1 (assuming X is, say, wealth).<p>It seems to me that &quot;loss aversion&quot; might be reconstituted as &quot;utility hysteresis&quot; to avoid the ambiguity.