Here is a little detail I learned in behavioral finance class: you don’t need behavioral finance/econ to discover loss aversion. All you need is a rational utility maximizing agent in a standard neoclassical framework who has a concave utility function (such as LOG which is commonly assumed to model diminishing marginal utility). From this you see that the rational agent has more to loose from a one unit negative change than a one unit positive change i.e. loss aversion.
Here is a little detail I learned in behavioral finance class: you don’t need behavioral finance/econ to discover loss aversion. All you need is a rational utility maximizing agent in a standard neoclassical framework who has a concave utility function (such as LOG which is commonly assumed to model diminishing marginal utility). From this you see that the rational agent has more to loose from a one unit negative change than a one unit positive change i.e. loss aversion.