I’ve been reading the book “The Black Swan”
recently on the recommendation of my two partners. I had heard about
the book for years, but it never made it off my “to-read” list until
now.
One of the concepts that the book discusses is the way we think of risk differently when we are generating profits vs. when we are minimizing losses. The simple illustration goes something like this:
If someone gave you the offer of $100, no strings attached, vs. flipping a coin for the chance of winning $200, what would you choose? Although both options are mathematically equivalent, most folks would choose the $100.
To read the full, original article click on this link: The Psychology Of Loss Aversion (And How It Applies To Venture Capital)
Author: Rob Go
