The Negotiator Magazine

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In the case of the loss of a 1 coin the green line drops quicker than it rose when a gain of 1 was experienced, thus indicating that the pleasure of winning is less intense than the pain of loosing. Kahnerman and Tversky depict this graphically (see Fig. 2):

In the upper right "gain" quadrant the value increases somewhat more quickly in the lower happiness range, levelling off in the higher happiness ranges, thus indicating that a small gain is very efficient at making a person happy. In the lower left "loss" quadrant the line dips sharply below where the logical 45% line should be and remains there, thus demonstrating that losses are experienced more strongly than would logically be expected. The loss line dips more sharply than the gain line ever rises, indicating that humans would rather not win than lose, as losing tends to hurt more than is actually the case.

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October 2004