The validity of the author’s point seems to depend on what is the best way to interpret the phrase “losses hurt more than equivalent gains”. Two ways that you could interpret it in which it would be a consequence of loss aversion but not of DMU:
“Having your wealth decrease from X to Y decreases your satisfaction more than having your wealth increase from Y to X increases it.”
“The pain of a small loss is significantly more than the pleasure of a small gain.”
It seems to me that most of the quotes at the end, if you interpret them charitably, mean something like the above. So the post seems like a nitpick to me. It’s great to explain the difference between loss aversion and DMU for people who don’t necessarily know about them, but it’s not clear to me that it means that the quoted people were actually wrong about something.
I would also disagree with point #3, e.g. the last sentence of the Economist quote seems valid as an intuitive explanation of loss aversion but not of DMU.
The validity of the author’s point seems to depend on what is the best way to interpret the phrase “losses hurt more than equivalent gains”. Two ways that you could interpret it in which it would be a consequence of loss aversion but not of DMU:
“Having your wealth decrease from X to Y decreases your satisfaction more than having your wealth increase from Y to X increases it.”
“The pain of a small loss is significantly more than the pleasure of a small gain.”
It seems to me that most of the quotes at the end, if you interpret them charitably, mean something like the above. So the post seems like a nitpick to me. It’s great to explain the difference between loss aversion and DMU for people who don’t necessarily know about them, but it’s not clear to me that it means that the quoted people were actually wrong about something.
I would also disagree with point #3, e.g. the last sentence of the Economist quote seems valid as an intuitive explanation of loss aversion but not of DMU.